More people need to review their protection cover after life events to adequately protect their income
- 42% of all protection policyholders have experienced a change in personal circumstances since taking out their cover
- Out of those respondents, just 19% made adjustments to their cover
- Yet over a third of those had not considered if any changes to their cover were required
Research from investment, protection and retirement specialists LV= has explored attitudes to income protection to coincide with Income Protection Awareness Week (IPAW).
Although 42% of UK adults who own a protection product experienced a change in circumstances such as a new job or having a child, only around a quarter (28%) asked their financial adviser if they needed to adjust their protection cover.
The Wealth and Wellbeing Research Programme* – a study of 4,000 UK adults – reveals:
- Over a third of protection policyholders who experienced a change in circumstances had not thought about whether any changes to their protection cover was required. This rises to 46% of women, compared to 26% for men.
- Just under a fifth (19%) had made changes to their protection cover due to a change in their circumstances.
- One in ten UK adults with a protection product had experienced welcoming a child and changing jobs since taking out their cover. In both cases, this is more likely for 18-34 year olds, compared other age groups.
As household priorities shift over the years, it is important to review protection policies to see if they can better support any life events or job changes. Any changes to work, family planning or relationship status could mean that an existing income protection plan may no longer be fit for purpose. Many people would not think of this despite being at risk of losing their home if they experienced a financial shock.
LV= Parent and Child Cover reaches its fifth anniversary
It has been five years since Parent and Child cover was included with all new LV= Income Protection policies in 2018. This feature pays a lump sum if a parent needs to care for a child because they had an operation/medical procedure or are diagnosed with a specific illness. This benefit covers 54 conditions and LV= will pay six times the monthly cover amount up to a maximum of £25,000 per claim**. The money paid could allow customers to take unpaid leave from work to care for their child, or cover costs associated with medical treatment.
In 2022, LV= paid six Parent and Child Cover claims, totalling over £47,000. The most common condition for claims was cancer, followed by stroke and organ transplant.