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February 6, 2009updated 13 Apr 2017 8:57am

Millions of British policyholders in need of advice

Over 10 million people in the UK could have the wrong life and other protection insurance, reveals a study undertaken by Barclays Financial Planning (BFP), a unit of Barclays Bank specialising in life insurance, pensions and investment products BFP based its estimate on a total of 25.6 million protection policyholders of which 42 percent 10.75 million have had one or more specific life changes since taking out or last updating their cover Life changes specified by BFP are purchasing a house, changing jobs, having a child, getting married, getting divorced or purchasing a second home.

By LII editorial

Over 10 million people in the UK could have the wrong life and other protection insurance, reveals a study undertaken by Barclays Financial Planning (BFP), a unit of Barclays Bank specialising in life insurance, pensions and investment products.

BFP based its estimate on a total of 25.6 million protection policyholders of which 42 percent – 10.75 million – have had one or more specific life changes since taking out or last updating their cover. Life changes specified by BFP are purchasing a house, changing jobs, having a child, getting married, getting divorced or purchasing a second home.

“It is a worrying statistic that over 10 million people could have the wrong cover when they think they are protected,” said BFP director of advice and products David Stuart.

“Perhaps part of the problem is that people are not often fully aware of what need and what sum their protection products cover in the first place, especially when they buy without advice,” he added.

His point is underscored by BFP’s research based on a survey conducted in October 2008. This revealed that almost 40 percent of people who have taken out protection policies did so without receiving professional advice and 13 percent did not know whether they had taken advice at all.

BFP’s survey also revealed that a third of people prefer to obtain their financial advice from friends, family or their partner rather than a professional.

Also of concern is that 20 percent of policyholders have no idea what their life should be insured for and 48 percent do not know why they took out their protection cover, or did so just because they thought they should.

As amazing, 73 percent of policyholders do not know how much they are insured for or what they would receive if they needed to make a claim.

But perhaps any cover is better than no cover at all in a country where, according to BFP, 47 percent of the adult population – some 25.6 million people – have no protection insurance whatsoever.

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