New research shows advisers still have a role to play in helping to bridge the protection gap

The research shows that Brits are still reluctant to protect themselves and their families against a potential loss of income.  Less than four out of ten Brits (33%) are willing to reduce their monthly outgoings to fund some form of mortgage or family protection despite the challenging economic conditions.

The survey also reveals that there is still an opportunity for advisers to highlight the benefits of taking out a protection policy, particularly for those with dependents or mortgage commitments whom are currently failing to address their immediate protection needs.   Zurich‘s findings reveal that only a third of those married with children (33%) believe critical illness cover is important whilst less than a third (29%) view income protection as important.   

Similarly, of those homeowners with mortgages, less than four out of ten (39%) rate critical illness as important whilst a similar minority (37%) understand the importance of  income protection.

The analysis also considered whether Brits were likely to take out cover in the future, given the current economic uncertainty.  Alarmingly, over a fifth (22%) 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%) 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%) 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%) 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.

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%) believing the state would provide (13%) whilst a similar number (11%)  relying on employers for sick pay and health benefits (11%). 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%) 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.