"Misunderstanding also remains over the types of claim income protection can support. "
The study found that more than a quarter (26%) of homeowners believe income protection does not cover mental health conditions such as anxiety or depression. Among those who already have a policy, that rises to 34%, while 37% of under 35s said the same.
Only a quarter of homeowners correctly said mental health is covered, while 48% said they did not know. The press release said mental health is the leading reason for both short term and long term workplace absence, and cited ABI data showing mental illness accounted for the highest value of income protection claims in 2024 at £37m.
The research also highlighted confusion around access to cover for self employed borrowers. One in six (16%) homeowners said self employed people cannot get income protection. That rises to 31% among under 35s and 28% among existing policyholders. A further 38% said they did not know whether self employed workers were eligible.
LifeSearch and HomeOwners Alliance said this misunderstanding could leave a large part of the workforce exposed, with more than 4.3 million people in the UK now self employed.
The study also pointed to confusion within households about who may need cover. Nearly one in five (18%) homeowners said only the main earner needs income protection. The figure rises to 30% among under 35s and 26% among households with children. Among those who already have an income protection policy, 26% agreed that only the main earner needs cover.
The organisations said this view may not reflect the reality of household finances, particularly as many borrowers rely on two incomes to meet mortgage payments and other essential bills. The release added that joint first time buyer mortgage applications reached 62% in 2024.
Misunderstanding also remains over the types of claim income protection can support. More than a third (36%) of homeowners believe it only pays out for permanent or very serious conditions. That rises to 49% among under 35s and 45% among current policyholders. Another 36% said they did not know what conditions are covered.
The release said this is in line with findings from CIExpert’s Critical Thinking report, which found consumers associate income protection claims with cancer, serious physical injury and heart attack, while ABI data shows musculoskeletal conditions and mental health are among the main causes of claims.
It also found that 22% of homeowners believe they can only claim once on an income protection policy. That increases to 26% among current policyholders and 36% among under 35s, despite most policies allowing multiple claims.
Debbie Kennedy, chief executive of protection specialist LifeSearch, said: "Income protection can provide a valuable safety net to so many people, yet this research shows there’s still a real gap between how people think it works and what it actually provides.
"At LifeSearch we see this play out in real conversations every day. These misconceptions reflect an industry that has historically done a better job of selling protection than explaining it. If we want customers to value their cover, renew it, and tell others about it, then clearer communication, better ongoing engagement and stronger product understanding need to become the norm - not the exception."
Paula Higgins, chief executive of HomeOwners Alliance, said: "These findings reveal a clear gap between perception and reality when it comes to income protection. Many homeowners wrongly believe it won’t cover mental health, isn’t available to the self-employed, or only pays out for serious conditions - leaving them more financially exposed than they realise.
"At a time when more people are self-employed and households depend on two incomes, these misconceptions matter. Income protection can provide vital support if illness or injury stops you working, yet too many people either misunderstand it or overlook it entirely.
"There’s a real need to improve awareness so people understand what cover is available before it's too late."
