Misunderstanding the Value of Income Protection
10 Feb 2017
Royal London recently undertook a study of 2,000 people to find that while a quarter of UK adults have a life insurance policy (26%), just 6% have critical illness cover and 4% have income protection insurance.
The consistently top reason stated for not taking out either products was price – nearly 1 in 3 people studied do not have life insurance, critical illness cover or income protection saying they think the products are too expensive (29%, 32% and 31% respectively). Actually, the price is dependent on many factors, including age, health, and how much you need to pay your bills etc.
As an example, for Income Protection if you are 23, a non-smoker and in good health, then a premium of around £35 per month would provide you a monthly income of £1,375 for up to 45 years (the number of years to state retirement for a 23 year old). Remove the 45 year cover and select a short-term (1-2 years) and the cost comes down significantly.
The second reason was people not seeing the benefit of the product. Yet almost two fifths (38%) say it is important to ensure that their family and dependants are looked after financially should they die and half (47%) agree that life insurance is essential for anyone with a mortgage or dependents. This suggests that people just do not realise what the various insurances provide which is easily remedied by just taking a look around this website for all the information you need and calling LightblueOnline on 01702 719625 who will then help you choose the right solution for yours and your family’s needs.
The third reason is not trusting insurance companies to pay out in event of the claim. Yet the most recent industry figures show insurers pay out in 97.2% of all claims.
What’s really interesting though is that their research showed that people are far more likely to think they will die during their working life than be hit by redundancy or critical illness, yet statistically it is far less likely. Official statistics show that more than four times as many people were made redundant than died early*. Showing the importance of having cover beyond life insurance, Income Protection for instance. Income Protection was declared the one policy every working adult should consider in Which? Money in 2013. To find out why check out our webpage here and call LightblueOnline on 01702 719625
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