45% of adults aged 25-44 without a protection policy are not confident they can financially cope if ill
Three in five people without a protection product would feel more financially resilient if they had a policy that paid if they were unable to work due to illness or injury.
Research* from protection specialist LV= highlights how many people aged 25-44 would struggle financially if accident or illness stopped them from working.
The research reveals that 45% of 25-44 year olds without a protection policy are not confident they can financially cope if they fall ill. Over a quarter (28%) of workers in this age group would struggle to pay household bills if they were unable to work for two months or more.
Half also say their partner relies on their income, and they need both incomes to cover their monthly outgoings.
LV= paid more than £20m in critical illness claims between January and September 2022**. More than 258 people were supported after they received a life-changing diagnosis, including 14 child critical illness cases with claims totalling £360,000.
The youngest person to make a critical illness claim was 22 years old, while the average age to claim is 48 years old. The most common causes for critical illness claims were cancer (57%), heart attacks (13%) and strokes (7%).
The figures are published in LV=’s latest Fuel for Life online magazine for financial advisers specialising in protection.
It includes insights for advisers who have policyholders considering the value of protection cover as families continue to feel overwhelmed by the cost of living crisis.
Mike Farrell, Protection Sales Director at LV=, said:
“The cost of living crisis will continue to be a challenge that many of us face for some time to come as the UK navigates through difficult economic conditions.
“Our research shows that three in five people without a protection product would feel more financially resilient if they had a policy that paid if they were unable to work due to illness or injury.
“That is why is it so important for people to consult a financial adviser and find a protection policy to protect people and families, and show them the positive impact that protection will have on achieving their financial goals. Protecting income is at the heart of building financial resilience and an area where advisers are uniquely placed to support their clients.”
Andy Walton, Protection Proposition Director at Mortgage Advice Bureau, said:
“As the cost of living crisis bites, it is even more important to ensure we have the right conversations with customers about their financial position if they are unable to work. The data from LV= research shows that almost half of people surveyed are not confident they can cope financially if they fall ill. This lines up with UK savings statistics which tell us that 41% of Brits don’t have enough savings to live for one month without income.
“We understand that disposable income in real terms is going to contract for many people - but this makes protection even more crucial. As advisers we should do more, not less at this time to help customers understand the ‘knife edge’ they are potentially living on without it. We should help customers move protection up their priority ladder.”
Emma Thomson, Head of Protection and GI Propositions at Sesame Bankhall Group, said:
“LV=’s Fuel for Life report provides a wealth of practical information illustrating the value of protection, with a specific focus on income protection and why people need cover. I believe this is a ‘must-read’ for advisers as it provides so much insight into consumer views, along with the positive impact added value services can have.
“The report also contains a detailed summary of LV=’s product options and outlines the support available to help advisers enhance their customer conversations by taking advantage of the range of tools on offer. In addition, the inclusion of customer case studies really helps to bring the value of protection cover to life. Well done to the LV= team for producing such a valuable resource to help advisers and their clients.”
* LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium between 16th August and 1st September 2022
** LV= internal claims statistics for 2022 between 1st January and 30th September inclusive.