More than 50% of the UK population do not have any form of life insurance cover, says Swiss Re, one of the world’s largest insurance companies. In their latest annual report they estimate that an additional £2.4 trillion of insurance cover would be needed to bridge that gap.

But in practice the gap is not that big. Firstly, there’s the people who are ruled out from having life insurance due to their age - 1 in 6 people are aged over 65 and effectively uninsurable, and just over 1 in 5 are aged under 18, the minimum qualifying age for life insurance cover. Then there’s a raft of single people aged between 18 and 65, who have no dependents and for whom life insurance is quite unnecessary. Having said that, there’s no doubt that there are still many families out there who desperately need life insurance but who don’t have cover.

So what’s holding them back?

There are still lots of people who simply don’t understand what life insurance does and because it’s never top of their minds, nothing ever gets done. Then there’s apathy. Life insurance isn’t exactly a pleasurable buy, there’s no window-shopping or thrill in the purchase. So the probability is that unless a financial adviser sits down in front of these people and talks about life insurance, they’ll remain uninterested and uninsured.

Then there are the people who know they need life insurance but say they can’t afford it. But for many, “can’t afford” actually means “I choose not to afford”. They might be happy to spend £3,000 a year on a 30 a day smoking habit but won’t cut back to pay for a monthly premium that protects their family’s future.

There is no disputing the fact that some people have applied for life insurance and genuinely found the final premium offered, totally unaffordable. For the majority, life insurance at standard rates is fine but over the last seven years there has been a huge rise in the number of people who are paying loaded premiums. It’s due to the life insurance companies making it increasingly difficult for people to meet their definition of being “healthy”. Today, twice as many people as there were seven years ago, are being charged higher premiums because the insurance companies rate them as an above average health risk.

Even four years ago it was quite obvious who would have trouble getting insurance at standard rates – former cancer suffers, someone with a history of heart or circulatory problems and diabetics for example. The situation has now changed. The insurers’ application forms are now far more detailed and ailments that were previously acceptable under standard terms are now only accepted with loaded premiums. Take your weight – insurers are clamping down where they consider a person’s weight to be a threat to their longer-term health. In it’s not only the obviously obese that attract the insurer’s attention. The insurers are using a calculation called the Body Mass Index. This is calculated by dividing a persons weight by the square of their height. Insurers now want a BMI of 29 or less, whereas previously up to 40 was OK. This means that a woman weighing 83 kilos and 1.66 meter tall would now face higher premiums.

The application process too can put people off. Whilst around 30% of applicants will get a decision almost immediately, for everyone else the process can become one delay after another. As if a 14-page application form were not enough, some people are faced with additional forms to complete and medical examinations. Sometimes the whole process can stretch to 8 weeks, even more, before the applicant knows exactly how much the premium will be. If that works out more that the person can afford, the applicant is often too fed up of the whole process to start again with another insurance company. This leaves yet another family uninsured.

Despite these criticisms, the insurers claim that life insurance premiums are generally lower today that a few years ago, thanks to more sophisticated underwriting procedures and computerised risk assessment. Furthermore around 10% of life insurance is bought on the Internet where competition has forced discounting resulting in much lower premiums.

Nevertheless, in our view it will take many years to get the percentage of people covered by life insurance above the 50% mark.