Legal & General has urged people not to avoid taking out protection simply because they think it is too expensive.  

According to the insurer, 65% of people over-estimate the cost of £150,000 of life cover and 35% over-estimated the cost of adding a critical illness option.

Although 24% of people surveyed said £150,000 level term assurance over 25 years for a healthy, non-smoking, 25 year-old male would cost between £11 and £20, while 18% guessed between £21 and £30 and 22% thought it would be more than £30. However, L&G put the cost at £8 per month.

Adding critical illness would cost a further £18 per month, but 14% of those question by L&G incorrectly estimated between £21 and £30, while 23% thought it would cost more than £30.

Karen Blatchford, commercial director for housing at L&G, said: “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.”