"There’s a real opportunity for advisers to help explain the benefits of IP for those who are renting."
- Daren Boys, Protection Portfolio Distribution Director at Aviva
Of those surveyed (1,002), 19% of adults in the UK said they’d never heard of Income Protection (IP), rising to 25% amongst Gen Z respondents. Overall, 71% of adults have never investigated getting an IP product.
However, according to the latest survey from iPipeline, advisers are most positive about growth in IP sales (43%), followed by Critical Illness (CI)(23%), and Term Assurance (21%). Coinciding with Swiss Re’s ‘Term & Health Watch’ 2024 Report, 47% said they ‘strongly agree’ that 2024 is shaping up to be a positive year in terms of protection sales growth – this is 10% higher than in 2023.
“There does seem to be a growing sense that protection advice is changing for the better and that quality is starting to trump quantity. The move to recommending a better-quality mix of protection solutions could be why we’re seeing the growth of IP,” said Stephanie Hydon, Client Distribution Director at iPipeline.
READ MORE: iPipeline reveals 43% of advisers are most positive about IP sales growth in 2024
Aviva found over two-thirds (67%) said that they’d struggle financially if they were unable to work. 47% said that they’d rely on their savings to cover their living costs if they were unable to work due to ill-health or injury. Slightly fewer (44%) would cut back on non-essential expenditures whilst a third would control their spending by shopping for lower-cost brands.
40% of adults would look to find money from elsewhere – either by borrowing from friends or family (17%), relying on someone else to pay the cost (17%), or by taking out a bank loan (6%). Just under a third (32%) say they’d rely on state benefits.
Aviva believes this research reaffirms two known barriers to buying IP: perceived cost and lack of awareness. Over a quarter (26%) of adults said that they didn’t think that they could afford it, and 23% said that they didn’t think they needed it.
Only 27% of adults said that they may investigate IP in the future, and 32% said they would never consider taking out a policy.
When asked what would prompt them to consider buying IP, most respondents said buying a house (36%). Fewer than one in ten (9%) said that they’d consider taking out IP when they moved into a rental property. Aviva stressed this shows an opportunity to raise awareness of protection for your housing costs – whether you own your home or not.
“Our research confirms that most people recognise that they’d struggle financially if they were unable to work due to ill-health, however, there’s still a heavy reliance on savings or family members to cover their living costs,” explained Daren Boys, Protection Portfolio Distribution Director at Aviva.
He said: “IP provides a much-needed safety net. However, Aviva’s research confirms that lack of awareness continues to be a key barrier to IP sales. Although people are more likely to consider IP when they buy a house, very few people would think about taking out an IP policy when they move into a rental property.
“There’s a real opportunity for advisers to help explain the benefits of IP for those who are renting. This can open the door to starting conversations about IP with the younger generations now, rather than needing to wait until individuals reach traditional milestones like buying a house,” Daren concluded.
