- 4% don’t know how long ‘long-term income protection’ should last
- 47% would turn to the State for aid
- 71% would lose up to £300 of their weekly income if had to rely on SSP
- Brits twice as likely to buy pet insurance than income protection
Less than 2% of British people understand the duration of long-term income protection and over-estimate the support provided by the Government, research from Cirencester Friendly has shown.
A survey of over 2000 adults by Censuswide has found that only 1.6% of people were able to correctly identify the length of time long-term income protection would last. Most contracts pay out until retirement, but 65% of those surveyed thought that this protection could last 10 years or less (if taken out aged 30) and 45% thought that it would not last longer than 5 years.
When asked where they would go to for financial support if they could not continue working due to accident or ill-health, nearly half the population (47%) would look to the State. However, with Statutory Sick Pay (SSP) providing just £89.35 per week for the first 28 weeks and the government offering £73.10 employment support allowance per week thereafter (dependant on circumstances and National Insurance contributions), the majority of the British public would struggle financially if they were struck by a work-impeding illness or injury. Some, 71% of those surveyed would lose up to £300 of their weekly income if they had to rely upon SSP.
Despite this lack of understanding around the benefits of and possible need for income protection, Britons are twice as likely to purchase insurance for their pets (21%) as they are to buy their own income protection (10%). Indeed, more people would purchase insurance for their mobile phone (16%) than insure against accident or illness preventing them from working.
Rebecca Young, Head of Marketing at Cirencester Friendly commented:
“The lack of understanding around income protection insurance is really quite shocking and perhaps goes some way to explaining why only 10% of people say they would take out this form of cover. However, it appears that Britons are also ill-informed with regards to the level of support provided by the State if they fall ill.
“The Government aid is intended as a safety net only – the State’s average long-term support is just over £70 per week; less than one fifth of the average take-home pay in the UK which stands at over £400 per week*. Those who have the misfortune of an extended leave of absence from work could face serious financial hardship if they have not put adequate protection in place.
”While people are more concerned with insuring their pets and their mobile phones, these findings should serve as a wake-up call; if you are unable to work then paying for either of these might be a luxury you cannot afford.”
For more information download our ‘Optimistic or idealistic?’ infogaphic or contact our Sales Team on 0800 587 5098 option 2 to find out more about our long-term income protection contracts.
*ONS Annual Survey of Hours and Earnings: 2016 provisional results http://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2016provisionalresults#average-earnings
