Young people are the most financially vulnerable consumers
The number of young people who are buying life cover and other forms of financial protection continues to remain worryingly low.
Figures for February 2010 released by Protection specialists LifeSearch show that only 3.5% of all protection policies written by the company during this period were bought by young people. This continues the trend seen in the previous 12 months.
The table below contrasts these figures with the other age groups:
Age group |
% of LifeSearch business |
0-25 |
3.5% |
26-35 |
25% |
36-45 |
32.5% |
46-55 |
26.2% |
56-65 |
10.4% |
66+ |
2.4% |
Source: www.lifesearch.co.uk.
Life insurance, Critical Illness and Income Protection are just three protection policies that are less expensive for younger people (age 25 and under), not only because of age, but also because younger people are likely to be healthier, which keeps premiums low.
Yet despite this price advantage young people are not purchasing protection products in significant numbers.
For example, a Life Insurance policy over a 30 year term would be £1440 more expensive if it was bought at age 35 rather than age 25 (for a non-smoking male looking for £100,000 of level term assurance).
Age |
Monthly premium |
Cost over 30 year term |
35 |
£10.00 Aviva / Legal & General |
£3600 |
25 |
£6.00 Legal & General |
£2160 |
Source: www.lifesearch.co.uk.
The positive news is that, when young people did purchase, Critical Illness and Income Protection proved popular, with 6.1% of all CIC and IP products sold going to the 0-25 age group, compared with 2.4% for Life Cover, and 3% for Family Income Benefit. This suggests that taking advice is proving to be of particular benefit to young consumers.
LifeSearch Policy Adviser, Matt Morris, said: "The industry continues to fail to reach young people with the message of how important protection is for their financial stability. Often they either buy no financial protection at all or rely on the internet to get the best deal. That might work with car insurance, but not with financial protection." Enquiries
Notes to editors
- About LifeSearch
- LifeSearch can source case studies where required and can provide tables of typical premiums.
- Consumers can now buy Protection Insurance products online with regulated advice in a quick and simple format for the first time ever without having to deal with an adviser at www.getliferight.co.uk.
- Contact LifeSearch
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