SkipNav

A quarter of working adults without income protection would like to have it

17/10/2022
PROTECTION
  • Nearly one in five said they would struggle to pay their mortgage or rent if they couldn’t work for two months due to illness or injury
  • 26% of workers who do not have an income protection product would like to have it

Research from protection specialist LV= has explored attitudes to income protection to coincide with Income Protection Awareness Week (IPAW).

Our research* examining financial resilience reveals:

  • 15% of working adults had an Income Protection policy in place, while 12% had IP provided by their employer 
  • Over a quarter (26%) of workers who don’t hold an IP product would like to have one
  • 60% of 25-44 year olds without protection would feel more financially resilient if they had a policy that paid if they were unable to work due to illness or injury 

Many people do not have adequate savings if unable to work, leaving them vulnerable to financial shocks:

  • 26% of working adults have less than £1,000 in savings or no savings at all
  • Almost one in five (19%) would have to rely on their partner’s income to cover bills if they were unable to work
  • Only half of workers (49%) would be able to survive more than four months without an income. 

Mortgage holders are more likely than renters to hold an income protection policy

  • One in four (25%) mortgage holders have income protection compared to just over one in ten (11%) renters surveyed
  • 19% of UK workers would struggle to pay their mortgage or rent if they couldn’t work for two months due to illness or injury
  • But 24% of mortgage holders surveyed believe that they don’t need income protection 

LV= paid £13.6 million in new and on-going income protection claims in 2021. The most commonly claimed conditions were Musculoskeletal issues (20%), fractures (20%) and cancer (17%), representing nearly 58% of all income protection claims.

“As energy prices and day-to-day living costs are rising, people are looking at ways to rein in their spending. Many are considering cancelling insurance policies, but it is important that they understand the value of protection generally and specifically the benefits that income protection provides.

“Statutory sick pay, for example, amounts to just £99.35 a week and groups that are vulnerable to financial hardship, such as renters or self-employed workers, would struggle financially if accident or illness prevents them working.

“People may question if they can afford protection, but it offers huge benefits and the financial impact of a serious illness or accident can be devastating.

“LV= offers payment breaks*** for the most vulnerable people who are struggling to pay protection premiums and we can work with advisers to help clients retain their cover.”


 
Mike FarrellMike Farrell, Protection Sales Director at LV=

Notes

* This includes both new claims and claims made before 1 January 2022, that were still in payment during 2022
** LV= surveyed 4,000+ nationally representative UK adults via an online omnibus conducted by Opinium in December 2021 and March 2022
*** Terms and conditions apply