"Being unable to work due to an accident can result in a loss of earnings which can seriously impact a person’s quality of life, particularly their financial wellbeing."
- Graham Singleton, CEO of National Friendly
Of those surveyed (2,000), 51% of 18–34-year-olds have some form of cover to protect their income against ill-health or injury. However, National Friendly found that, overall, 67% of adults in the UK don’t have any form of Income Protection (IP), highlighting a growing need to educate consumers on the importance of protecting their income as well as the range of financial products available.
Notably, 32% of those without Accident Only Income Protection (AOIP) said they’d never thought about it, followed by concerns about affordability (29%) and prioritising other living costs (26%). National Friendly believes these figures suggest consumers still consider IP an ‘expensive luxury’ rather than an important pillar in financial planning.
Meanwhile, 16% of those surveyed thought their employer would pay most of their income if they became unable to work due to ill-health or injury - this figure demonstrates a lack of understanding and naivety among those in the UK workforce.
Concerningly, National Friendly found that only 38% of advisers have recommended AOIP to a customer. 62% of advisers were either unaware of the product, or solely considered AOIP an option for customers that didn’t qualify for other income-related products.
Commenting on these findings, Jo Miller, Co-Chair of the Income Protection Taskforce (IPTF), said that although IP must be the preference, “I think AOIP also has its place in the market.” Jo said that she’d had conversations with advisers who see it as a good option for certain types of customers who either resist or don’t qualify for IP.
“For me, AOIP would have its place for some clients where budget or personal circumstances mean that something is better than nothing […] Regular reviews by advisers would also give the chance to upgrade cover," she explained.
Graham Singleton, CEO of National Friendly, agreed “being unable to work due to an accident can result in a loss of earnings which can seriously impact a person’s quality of life, particularly their financial wellbeing.”
“More needs to be done to encourage take up and understanding of AOIP, particularly among those aged 35+, so they can continue to pay for essential day-to-day living costs and bills if they find themselves unable to work due to an accident,” he concluded.
