According to an online survey of 2,000 adults by Royal London, half of those surveyed believe life insurance is essential for someone with a mortgage or dependants and yet only 60% of people with a mortgage have life cover. While 60% of those surveyed with a mortgage have a life insurance policy, just 29% have critical illness cover and 19% have income protection insurance, suggesting that better education is needed to help make people more aware of the benefits of taking out protection
Income Protection pays out a regular income if you’re unable to work due to an accident or illness or, with certain policies, unemployment. For a monthly premium that can be adjusted to suit your budget, this valuable insurance will help to reduce stress, prevent your family suffering financial hardship and help you get back on your feet. And budget is clearly a factor when it comes to the self-employed taking out protection, with two fifths (41%) surveyed saying they could not afford to save money on a monthly basis. LV= also found there was a lack of understanding among the self-employed, which could account for such a large number having no income protection cover. In fact, four out of ten self-employed workers mistakenly believe they aren’t eligible for this sort of cover.
We believe some kind of protection insurance should be considered essential for anyone who has a mortgage or people who rely on their income – or both. The financial impact of not having cover could be devastating; think about what would happen in your situation if the main breadwinner was unable to work for a long period of time, or was diagnosed with a critical illness. How would you fund your mortgage payments, keep on top of monthly bills or pay for treatment that isn’t available on the NHS? For less than the cost of a daily cup of takeaway coffee* you can protect yourself and your family and help deal with any consequences that could occur from illness, accident, unemployment or death. That’s why, when we talk to clients about protection, we talk about value, rather than cost. If you’re concerned you’d be wasting money every month because insurance providers don’t pay out, you might be surprised to know that 97.8% of claims were paid in 2017 – a record-breaking £5bn in income protection, critical illness cover and life assurance.
Overcoming the barriers The main reasons why people feel they don’t need protection: 1. Cost 2. Not seeing the benefit 3. Not trusting that a provider will pay out.
The perceived need for cover across age groups
I don’t need life insurance 18-34 years old 28%, 35-54 years old 27%, 55+ years old 47%
I don’t need critical illness cover 18-34 years old 34% 35-54 years old 37% 55+ years old 67%
I don’t need income protection 18-34 years old 38%, 35-54 years old 49%, 55+ years old 83%,