New research from insurer Zurich reveals that less than four out of ten Brits (33 per cent) are willing to reduce their monthly outgoings to fund some form of mortgage or family protection despite the challenging economic conditions.
Commenting on the findings, Peter Hamilton, Zurich UK Life’s protection development director said, “As household budgets become more stretched, protection may seem less of a priority for some. Yet in the current climate, it’s more important than ever that people have some degree of cover in place to protect their immediate needs and safeguard against a potential loss of income.”
Worryingly, the survey also reveals that majority of Brits with families or mortgage commitments are currently failing to address their immediate protection needs.
Zurich’s findings reveal that only a third of those married with children (33 per cent) believe critical illness cover is important whilst less than a third (29 per cent) view income protection as important. Similarly, of those homeowners with mortgages, less than four out of ten (39 per cent) rate critical illness as important whilst a similar minority (37 per cent) understand the importance of income protection.
Zurich’s analysis also considered whether Brits were likely to take out cover in the future, given the current economic uncertainty.
Alarmingly, over a fifth (22 per cent) of those surveyed do not currently have any form of mortgage protection cover and are not considering purchasing any. This figure rises to nearly a third (31 per cent) amongst those aged 45-54yrs.
The findings also examined some of the reasons behind Brits reluctance to take out cover. It seems that many people perceive protection policies as being just too expensive, with nearly half of those surveyed (47 per cent) citing affordability as a reason for not taking out additional insurance policies. Yet cover can be much cheaper than consumers might imagine. For example, for £10 a month, a 25 year, non smoking male could buy life cover of £182, 927 for a 25 year period.
The survey also shows that for many people, protection simply isn’t a priority. Nearly three out of ten (27 per cent) of those surveyed had no dependents and therefore believed cover wasn’t relevant. Yet whilst the need for life cover is reduced for those with no dependents, critical illness cover and income protection should still be considered in order to protect against a loss of income or severe illness. Furthermore, nearly a fifth (18 per cent) of simply tried to avoid extra insurance unless it was compulsory.
It seems that some Brits are still reluctant to take responsibility for their own protection needs, with just over a tenth of people surveyed (13 per cent) believing the state would provide (13 per cent) whilst a similar number (11 per cent) relying on employers for sick pay and health benefits (11 per cent). Yet it’s important that people understand just how much the state or an employer will provide if they fail to take out additional cover..
The findings also show that less than two out of ten (13 per cent) believe they are likely to need cover as they are in good health, yet for many people this is the best time to buy protection as if you’re in bad health it may simply not be available.
Concludes Hamilton, “Most people are happy to ensure their house and its contents, their car, their cat, their travel plans or their mobile phone, but they often give little thought to the income that funds their lifestyle.
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