| Many people overestimate life insurance costs by a wide margin, assuming cover is far more expensive than reality | Cost misconceptions often delay cover until major life events, leaving long periods without adequate financial protection | Taking out life insurance earlier can significantly reduce premiums while offering long-term peace of mind |
Life insurance is still widely misunderstood, with many people dramatically overestimating how much it actually costs. A recent survey1 highlights the scale of the misunderstanding, showing that respondents believed a typical life insurance policy would cost around £79.50 per month. In reality, the average premium is closer to £27.95, meaning costs are overestimated by around 184%.
Why misconceptions cause delays
This gap between perception and reality has a real impact on behaviour. Many people assume life insurance is unaffordable and delay arranging cover until reaching major milestones such as marriage, having children or buying a home. For some, these events may come later than expected, or not happen at all, leaving long periods without financial protection in place.
Cost remains the most common perceived barrier. More than a quarter of those surveyed said affordability was the main reason they had not taken out life insurance, despite the fact that many policies can be tailored to suit a wide range of budgets. In practice, monthly premiums can often cost less than everyday subscriptions or discretionary spending.
The value of early planning
The findings highlight the importance of understanding how flexible life insurance can be. Arranging cover earlier in life can often reduce costs while providing reassurance that loved ones would be financially supported if the unexpected were to happen.
1L&G, 2025
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for guidance only. Some rules may vary in different parts of the UK.
