Nearly half (44%) of UK workers overestimate the monthly cost of income protection, life cover and cash plan policies, research from The Exeter finds.

The study finds that 37% of UK workers overestimate the cost of both income protection and life cover policies.

In the case of cash plan policies, which are a cost-effective insurance option, the percentage of UK workers overestimating the cost rises to 59%. They also overestimated the monthly cost of products.

Those surveyed predicted the monthly cost of income protection to be £35.20 per month, higher than the actual average of £24 for a two-year limited benefit term.

Life cover also shows a disparity with a mean predicted cost of £34.70, which is higher than the actual average of £26 per month. And 7% of UK workers believe the cost would exceed £76 per month.

Cash plan policies are not exempt from these misconceptions with a predicted cost of £34.90 per month. This is despite plans starting from as little as £7.

The monthly cost of private health insurance was also underestimated. They estimated a monthly premium of £43.30, with the actual average cost being £85 highlighting the importance of guided options.

The Exeter’s data also shows that a sense of uncertainty around the cost of insurance is prevalent among UK workers.

One in five (19%) responded by saying “I don’t know” when estimating the cost of a private health insurance policy.

This uncertainty was clear on other insurance products too, with 20% of UK workers uncertain about the cost of income protection, life cover (16%), and almost a third (32%) for cash plans.

The health and protection provider surveyed 2,000 UK workers with the aim of highlighting their most pressing financial and health concerns over the past year.

It said affordability remains key with 40% of UK workers naming it as the most important factor when considering insurance products.

The Exeter director of distribution and marketing Steve Bryan said: “The implications of these findings are profound. Despite widespread awareness of protection and health insurance products amongst UK workers, they are missing out because of misperceptions around price. More worryingly they are likely disregarding insurance without being aware of the options available.

“As an industry, we have a collective responsibility to challenge perceptions around affordability so that financial resilience and access to private healthcare become valuable options for more consumers.”