"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."
45% of 25-44 year olds without a protection policy are not confident they can financially cope if they fall ill, according to new research from LV=.
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%).
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, commented: “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.”
