More people than ever are opting for income protection insurance.
Recent figures indicate that more people than ever are taking out income protection insurance.
In 2023, individual sales of income protection reached 247,000 – a 16% annual increase and a record high since data was first collected in 2001. Of this number, 97% of these sales were purchased with advice, emphasising the importance of taking advice. More people are also opting for critical illness cover. With 75,700 standalone sales last year – nearly four times higher than a decade ago.
Expert opinion
Yvonne Braun, the ABI’s Director of Policy, Long Term Savings, Health and Protection commented, “Financial resilience – the ability to withstand a financial shock – is a hugely important issue. It’s encouraging to see that so many people recognise that income protection and critical illness insurance are an important part of financial planning and play a crucial role in providing a financial safety net”.
Decline in general activity
Despite the rises in critical illness and income protection, the general protection market has seen a slowdown in activity. Last year, the number of individual contracts across all protection products decreased to 2.1 million – the lowest since 2018.
As with all insurance policies, conditions and exclusions will apply
1 ABI
Consumers unaware of critical illness cover
Recent reports have highlighted that there is a general lack of knowledge when it comes to critical illness cover.
Younger generations are particularly misinformed. One study (1) indicated that a fifth of Gen Z and Millennials don’t have critical illness cover because they do not understand it or its benefits. Additionally, a quarter thought that a pay-out could only be used to pay off a mortgage. Paul Roberts at CIEXpert commented that “critical illness cover suffers from an identity crisis, misunderstood, undersold and underbought”.
Read the small print
Another report (2) found 49% of policy holders did not know which illnesses they are covered for. Additionally, 57% thought their policy would still be in place after receiving a full pay-out. However, most policies only pay out once. Unaware ,consumers could therefore be left unexpectedly uninsured when they are most vulnerable.
Seek advice
85% of respondents1 said they have not taken professional advice regarding CIC, and two fifths do not have it because they think it’s too expensive. CIC is crucial protection; we can explain the benefits and find an affordable option that works for you.
As with all insurance policies, conditions and exclusions will apply.
Your home may be repossessed if you do not keep up repayments on your mortgage.
1 CIExpert
2 Vitality
Under 25s at risk of underinsurance
A survey has found that younger generations are more likely to under insure their home contents1.
The study identified the three main pitfalls when it comes to contents insurance:
• Being unaware that some policies have a single-item limit
• Not knowing how to accurately calculate the value of possessions
• Not having an up-to-date contents valuation.
68% of respondents aged under 25 were likely to be caught out by all three of these mistakes. While the same only applied to 17% of over 55s.
So, many young adults have not sufficiently protected their possessions and, should they need to make a claim, they risk not receiving the full pay-out.
Contact us to make sure your possessions are covered correctly.
As with all insurance policies, conditions and exclusions will apply.
1 GoCompare
Taking a blended approach to protection
Life insurance, income protection, critical illness cover and contents insurance – we understand it might feel overwhelming contemplating the many different types of protection you should have. But we can help make sense of it all.
Last year, 29% of adults aged 18-40 said they could not afford to have life insurance1. However, an adviser can help you to create a blended insurance plan that suits you and your budget, based on your unique requirements. After all, when it comes to protecting you and your loved ones, there is no such thing as one size fits all; there is often more to insurance policies than is shown on comparison websites, as many plans can be adapted to meet an individual’s specific needs.
As with all insurance policies, conditions and exclusions will apply.
1 Beagle Street
Here to help
Where do you begin with insurance?! We’re here to help you explore your options and make sense of what it all means for you. For more information about all of the options available; click here.
Click here to book an appointment to discuss your protection options.
Your home may be repossessed if you do not keep up repayments on your mortgage. As with all insurance policies, conditions and exclusions will apply.