Dead cash: Over £230bn in millions of UK life insurance policies at risk of going unclaimed
Over £230bn worth of life insurance policies is at risk of going unclaimed in the UK, according to new data shared with Morning Wire this morning.
Millions of widows and widowers or child beneficiaries could be missing out on billions in life insurance payouts, as nearly one fifth (18 per cent) of Brits had not told their family members that they have a life insurance policy in place, according to comparison platform GoCompare.
In total, 14.9 per cent of those with life insurance don’t provide their relatives with the information they need in order to claim.
As a result, 2.9m life insurance policies are at risk of going to waste. This equates to £230bn in unclaimed payouts, the average term life insurance payout value is £79,304.
Life insurance is collected after the policyholder passes away, but as GoCompare’s research shows many British families aren’t aware that their loved ones have these documents, while others are simply unable to access them, meaning they are not able to make a claim.
Moreover, while almost two-thirds (64 per cent) of life insurance holders have a last will and testament in place, only 29 per cent said they have detailed their policy in their will.
Issues can still arise even when dependents are aware of the policy, as more than a third (35 per cent) of those with life insurance told GoCompare that their families don’t know how to find their policy’s documents.
And it seems that not even a global pandemic could spur some on to take out a life insurance policy, as according to our research, only 3% of those who have taken out a new policy since the start of the pandemic did so because of Covid 19.
Richard Jones at GoCompare life insurance said: “Life insurance can be a financial lifeline for many families after losing a loved one, allowing them to pay off a long-standing mortgage or helping them to have a secure financial future, so it is worrying that our research found that so many policies could be left unclaimed.
“It is great to see how many people have bought life insurance, but it is useless if left unclaimed, and it seems that a staggering number of policies are at risk of just that,” he added.