The Protection Gap: Why We Insure Our Gadgets But Not Ourselves

It is a curious quirk of British culture that we wouldn’t dream of leaving a smartphone or a new sofa uninsured, yet many of us leave our most valuable asset—our ability to earn an income—entirely unprotected.

As we move through 2026, the gap between what we protect and what actually matters has never been wider. Here is a look at why Life Insurance and Critical Illness cover are the “missing pieces” in most UK financial plans.

The Gadget Gap: A Strange Reality

Statistically, the UK is a nation of “stuff” protectors. Recent data suggests that while over 85% of homeowners have contents insurance and millions pay for dedicated gadget cover, the numbers for personal protection tell a different story.

Only around 35% of UK adults have a life insurance policy, and even fewer—roughly 12%—have cover against serious illness. Essentially, we are more likely to insure a £1,000 iPhone than the person who works 40 hours a week to pay for it. If you drop your phone, it’s an inconvenience; if you suffer a stroke or heart attack and cannot work, it’s a life-altering financial crisis.

Life Insurance vs. Critical Illness: What is the Difference?

Many people confuse the two or assume they only need one. However, they serve two very different purposes.

1. Life Insurance (The “If I Die” Plan)

This pays out a lump sum to your family if you pass away. It is primarily designed to clear the mortgage so your family can stay in their home, and to provide “income replacement” so your partner and children can maintain their standard of living.

2. Critical Illness Cover (The “If I Live” Plan)

This is arguably even more vital for your day-to-day survival. It pays out a tax-free lump sum if you are diagnosed with a specific serious condition—such as most cancers, heart attacks, or strokes—and survive.

Statistically, you are much more likely to suffer a critical illness before retirement than you are to die. This payout can be used to fund private medical treatment, adapt your home for accessibility, or simply pay the bills while you focus on recovery.

Why Don’t More People Have It?

There are three common myths that often stop people from taking out cover:

• The Cost Myth: Many people assume the cost will be upwards of £50 a month. In reality, for a healthy person in their 20s or 30s, basic life cover can often cost less than a monthly streaming subscription.
• The “Work Covers Me” Myth: “Death in Service” is a great benefit, but it usually only pays 2 to 4 times your salary. For a family with a mortgage and young children, that money can disappear surprisingly quickly. Furthermore, if you leave or lose that job, the cover usually stops immediately.
• The State Myth: Statutory Sick Pay (SSP) remains significantly lower than most people’s monthly outgoings. Relying on it often leads to a family exhausting their entire life savings within a matter of months.

The Bottom Line

If you have a mortgage, a partner, or children, you are essentially a “money-making machine” for your household. You wouldn’t leave a factory full of expensive machinery uninsured—so why leave the person who provides for the family unprotected?

The best time to get cover is always “now,” as premiums are based on age and health; the younger and healthier you are when you apply, the lower your monthly costs will be for the duration of the policy.