Does regional location really affect life insurance cover?

As with any type of insurance, the need and cost of cover can vary significantly depending on individual circumstances.

Your post code is not one of the factors considered when underwriting life insurance and won't directly impact the cost of your premiums, but how much do regional differences come into play with regards to influencing the need for or level of cover?

We carried out some research to determine exactly that, looking at the per capita life insurance coverage and average monthly life insurance premium cost across all 48 counties in the UK.

This extensive research is based on 5-years worth of internal data and over 130,000 policies. We are the UK's largest life insurance broker^ and have sold over 1,000,000 policies since 2009.

Keep reading to discover our findings…

Top 10 Areas with the Most Life Insurance Cover

RankCounty / BoroughNumber of residents with policies (per capita)
1Cleveland1,034
2City of London735
3Lancashire453
4Cheshire432
5Dorset380
6East Yorkshire374
7Midlothian373
8Falkirk360
9Clackmannanshire358
10West Lothian355


Based on our internal data findings, Cleveland, in the North East of England, ranks as the area with the highest proportion of life insurance policies. 1,034 residents per 100,000 have life insurance cover in this county.

Whilst this area ranks number one in terms of the proportion securing cover, it still only equates to just over 1% having secured life protection.

The Cleveland area includes Middlesbrough, where 49% of households are among the most deprived 10% in the UK[1].

This may be why people in this area are looking to ease the financial burden for their loved ones after they’re gone.

Furthermore, the average house price in Cleveland is £169,942. This is still a significant amount, despite being cheaper than many areas in the Southern region of the UK[2].

It is likely many in the area have secured cover to ensure their loved ones can remain in the family home and settle the mortgage if the worst were to happen to them.

Top 10 Areas with the Least Life Insurance Cover

RankCounty / BoroughNumber of residents with policies (per capita)
1Croydon22
2Bromley56
3Southwark58
4Greenwich89
5Greater Manchester93
6Guernsey93
7Merton95
8Hackney95
9Islington105
10Tower Hamlets106


The lowest proportion of life insurance policies can be found in Croydon, with just 22 residents per 100,000 having life cover protection.

Croydon has an unemployment rate of 5.4%, which is considered one of the highest in the UK[3]. This compares to 3.7% in the North East[4].

With financial priorities focused on day to day survival, it is likely this is the reason why many residents in the area have not secured cover.

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Top 10 Areas with the Most Expensive Life Insurance Cover

RankCounty / BoroughTop 10 Average Monthly Premiums
1Highlands£41.53
2Haringey£34.49
3Guernsey£31.20
4County Armagh£30.72
5Richmond upon Thames£29.87
6Isle of Anglesey£29.33
7Flintshire£28.85
8Croydon£28.67
9Wiltshire£28.28
10Blaenau Gwent£28.21


Whilst it is possible to arrange life insurance from as little as 20p-a-day*, it was discovered that those in the Highlands pay on average £41.53 per month.

This equates to £1.38 a day.

The average life expectancy in the Highlands is 64 years for men and 65 years for women[5].

This is considerably lower than the UK average life expectancy of 81 years old.

Due to life insurance premiums being calculated based on the likelihood of a claim being made, this could explain why residents in the Highlands pay more for their cover.

Furthermore, drug-related death in Scotland (where the Highlands is situated) has the highest drug death rate in Europe[6]. Alcohol addiction is also high.

Again, it is likely these statistics affect the inflated cost of life insurance in the Highlands area.

Top 10 Areas with the Cheapest Life Insurance Cover

RankCounty / BoroughBottom 10 Average Monthly Premiums
1Eilean Siar / Outer Hebrides£20.59
2Clackmannanshire£21.30
3City of London£21.44
4Argyll and Bute£21.48
5Torfaen£21.57
6Neath Port Talbot£21.58
7County Londonderry£21.70
8County Fermanagh£21.71
9West Dunbartonshire£22.01
10Brent£22.09


On the other hand, residents of Outer Hebrides only pay an average monthly life insurance premium of £20.59.

This equates to 68p-a-day, 71p cheaper than in the Highlands.

It’s worth noting that the Outer Hebrides includes many small islands off the coast of Scotland.

As a result, it is likely that this subset of data is small. Therefore, a particularly low premium from one or two customers could pull the average down.

House prices on the Isle of Harris, one of the Outer Hebrides, are below the national average at £181,118[7]. Therefore, securing the cost of a mortgage in this region will require a lower sum assured.

As discussed, life insurance premiums are calculated on the level of risk you pose to the insurer. The lower the level of cover you require, the cheaper your monthly premiums.

It is likely this is a strong contributing factor as to why the Outer Hebrides experience the lowest monthly premium cost.

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Conclusion

As the data shows, differences in regional influences could have an impact on the cost and likely requirement of cover.

Based on our research, even areas that are close geographically, such as Outer Hebrides (£20.59) and the Highlands (£41.53), are shown to have very different findings.

However, it is important to remember that personal factors will also come into play.

Regardless of where in the UK you live, the average cost of life insurance can vary significantly between the best providers. Therefore, it is always best to compare multiple quotes to ensure you receive the best deal on your life insurance.

Our FCA-regulated and award-winning life insurance broker service can help you with this.

Sources:

[1] https://www.chroniclelive.co.uk/news/north-east-news/most-deprived-neighbourhoods-north-east-17027551

[2] https://www.rightmove.co.uk/house-prices/cleveland.html

[3] https://www.trustforlondon.org.uk/data/boroughs/croydon-poverty-and-inequality-indicators/

[4] https://www.croydonadvertiser.co.uk/news/croydon-news/croydon-one-highest-proportion-unemployment-1570578

[5] https://www.nrscotland.gov.uk/files/statistics/life-expectancy-areas-in-scotland/16-18/life-expectancy-16-18-publication.pdf

[6] https://www.bbc.co.uk/news/uk-scotland-48853004

[7] https://www.rightmove.co.uk/house-prices/isle-of-harris.html

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