In what has been one of the most uncertain times of our generation, falling ill or facing a change in employment has become a reality for so many. Most of us are guilty of thinking that ‘it’ll never happen to me’, but the reality is that it can happen to any of us.
Life comes at you fast, and when it does, it’s worth having some suitable protection in place to weather any storms.
Alarmingly, recent research (carried out on behalf of Metlife) into attitudes towards protection policies found that a large portion of mortgage holders admitted that it would take falling ill (31%), a change in employment status (25%) or having an accident (24%) before they would purchase protection. These somewhat laissez-faire attitudes to protection are cause for concern as, by the time homeowners consider taking out a protection policy, it could be too late.
New policies don’t typically offer backdated cover. In fact, our research found that one in seven (14%) regretted not taking out a protection policy that would have supported them with mortgage repayments.
Life events such as having children and getting married can prompt people to review protection, but our research found that, overwhelmingly, it is the unexpected changes in circumstances that encourage people to consider purchasing a protection policy.
With so much at stake, it can be hard to understand why 22% of those surveyed claimed there is no reason for them to consider purchasing a protection policy. Optimism bias is a type of cognitive bias that makes people believe they are not likely to have a negative experience, such as an accident.
Many of us can identify with an ‘invincible’ mentality, a survey from Smart Insurance found that 54% of adults in the UK do not have life insurance, with 18% stating it was because they haven’t given it any thought. Our research chimes with this with close to a third, (28%), believing they would not need protection and claiming the cost (25%) as a further reason for failing to financially protect themselves.
But these concerns, although understandable, do not negate the significant benefits of protection. Our research found that of those had who have financial protection in place, almost half (46%) said they wanted peace of mind, while virtually the same number (45%) said they wanted to be prepared should the worst happen.
More promisingly, the research found that people were starting to think about getting financially protected as a quarter of homeowners (23%) intended on purchasing life insurance, while 17% will take out mortgage protection cover, 15% critical illness cover, and 16% will purchase an income protection product covering accident, illness and unemployment.
Perhaps we need to change how we think about protection and see the benefits of knowing we are covered, when we need it. Just as many of us insure our household appliances or boilers against breakdown or repair, why not safeguard ourselves and our loved ones?
Income protection plans offer a much-needed safety net for when any of us fall on to hard times.
This type of policy ensures that you can pay your bills when someone is unable to work due to accident or illness.
The last year has certainly reminded us all how vulnerable we are and of the fragility of life, so let’s ensure we’re armed as best we can be and, if the unexpected should happen we can at least take some comfort from knowing we have a policy in place.
Research was carried out by Censuswide (on behalf of MetLife) among a UK representative sample of 2,000 homeowners, or those currently purchasing a property. The survey was completed in February 2021.
How Gardner FM can help
We have decades of experience in helping our clients put in place comprehensive protection solutions to cover them and their family.
We are not tied to any single product provider and can help you source the best policies in the market.
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