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Royal London: Industry needs to do more to tackle misconceptions around protection

Protection news for Financial advisers and Paraplanners

7 Aug 2018

Royal London: Industry needs to do more to tackle misconceptions around protection

Commenting on the ONS’s Wealth and Assets Survey which found that 48% of people aged 16 to 24 said that they would not be able to make ends meet for longer than one month if they lost the main source of income coming into their household. 

Toby Bainbridge, Head of Protection Solutions at Royal London said:

“Our research shows that more than half of people said they didn’t need income protection, yet the ONS survey shows that if young people were to lose their main source of income, they would not be able to make ends meet. The industry has work to do, to change people’s mindset, so they see protection as a necessity instead of something they don’t need. Sadly it’s only when illness strikes or an accident happens that people realise how valuable the financial protection from an income protection or critical illness plan can be.  This is a challenge to overcome, as time and again people say insurance is expensive and won’t payout and we need a concerted effort by the industry to address these misconceptions.”

Background

Our State of the Protection nation report found:

  • Despite only a small percentage of consumers saying they had life insurance (3%), critical illness cover (3%) and income protection (5%) through their employer, the majority of people felt they didn’t need income protection (58%), critical illness cover (47%) and life insurance (34%).  
  • Inertia plays a part in people’s decision not to buy, as 20% of full-time working people recognise they need income protection but don’t have a policy.  
  • Over a third (38%) of people working full-time feel they don’t need income protection, but just 8% said they didn’t need it because they had cover with their employer.

Read our State of The Protection Nation report here.

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