65% of people polled by Legal & General over-estimated the cost of taking out £150,000 worth of life cover. 35% over-estimated the cost of adding a critical illness option to that life cover.
Karen Blatchford, commercial director for housing at Legal & General, said: "Life cover can start from as little as £6 per month, which even families on a very tight budget may be able to afford. We're concerned that two-thirds of people are over-estimating the costs of protection."
£150,000 level term assurance over 25 years for a healthy, non-smoking man aged 25 would cost just £8 per month; 24% of people that Legal & General questioned thought that it would cost between £11 and £20, 18% thought that it would cost £21 - £30 and 22% thought over £30.
Adding critical illness cover for the 25 year old man would cost a further £18 a month. 14% of people that Legal & General spoke to incorrectly estimated between £21 to £30 and 23% said it would be more than £30.
Karen Blatchford added: "Just 38% of the people we surveyed have life insurance, which is cause for concern. People may wish to consider covering not just their mortgage debt, but their family expenditure and bills. Most families would really struggle if there was an unexpected drop in the household income."
