Research by insurance provider SunLife has found that people on average overestimate the cost of life cover by 394%.
On average, people think £100,000 of life cover would cost £50.98 per month; almost five times more than the average premium of £10.31.
SunLife also found that 47% of people have no idea how much life insurance costs, with this rising to 53% of those who cited affordability as the reason why they have no life cover.
Meanwhile, 58% of 55-65 year olds admitting they have no idea what life cover costs.
SunLife’s research also shows that of those that do not have life cover, 26% are concerned that they do not have any in place. 11% said their family would lose all or most of its monthly income if they were to become critically ill or die while 8% said they ‘did not know’ what the financial implications would be.
Dean Lamble, managing director of SunLife, said: “Our research shows people are not protecting themselves with life cover because they think it is much more expensive than it is; this misconception needs to be addressed. As an industry, we have an important role to play – we need to make life insurance more accessible so that more people realise they can afford it.”
And even amongst those who do have life insurance, SunLife’s research reveals that only 39% of people are certain they have enough cover. 11% say they know they are underinsured while 15% say they don’t know how much cover they have in place.
Lamble added: “It is worrying that there are many families out there that either have no life cover or insufficient cover in place simply because they are overestimating how much it costs.
“More than a quarter of those who don’t have life insurance say they are concerned about the fact they are not covered; we need to help these people get cover they can understand and afford so that, should the worst happen, they know their families are protected.”