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.

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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.