Almost half of those with protection insurance may have unsuitable cover because they have failed to update their policies after a life-changing event.

According to new research from Barclays, some 25 million Brits currently have some sort of protection policy, such as life insurance, critical illness cover or payment protection insurance.

Of these, more than 10 million (42%) have experienced a life-stage event - buying a house or second home, changing jobs, having a child, getting married or divorced – meaning they may be under the false impression that they and their families are adequately protected.

According to Barclays, the cost of updating an existing policy can be minimal so people shouldn’t automatically assume that their premiums will shoot up.

Lack of understanding on cover
The research also revealed a high level of confusion among protection policyholders regarding their level of cover.

One in five (20%) have no idea what their life should be insured for, while nearly three quarters (73%) don’t know ho much they are covered for or what they will receive should they need to make a claim.

Worryingly, nearly half (48%) do not know why they took out their protection cover, or did so simply because they thought they should.

If you are uncertain about your cover needs, it may be worthwhile visiting an insurance broker before taking out a policy in order to ensure you are adequately covered.

Keep your policies updated
“When you buy a protection policy this should not be the end of the matter,” explains Barclays advice and products director David Stuart.

“It is crucial that people think about updating any cover, or switching to different types of products if, for instance, they have a child, get married or buy a house.”

“It’s a worrying statistic that over 10 million people could have the wrong cover when they think they are protected.

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

Source:  EveryInvestor