A survey commissioned by Protection Review quizzed 2,000 people last March and found that a third of those questioned saw protection insurance as an expensive luxury.
A fifth of the responders said that they did not trust insurers to pay out claims. This is despite the fact that, according to Association of British Insurers (ABI) figures, 97% of protection claims were paid out in 2015.
Two thirds said that they had not been contacted by their insurers during the past two years. Just over 200 financial advisors that were also questioned and they said that a client’s protection needs should be reviewed at least every three years.
The lack of awareness about why protection insurance is necessary shows the need to educate people about the need for this type of insurance.
The importance of protection insurance was highlighted by Raluca Boroianu-Omura of the Association of British Insurers. She said:
“As well as financial support, protection insurance can help prevent people needing to leave work, and if they do need to leave due to illness or injury, rehabilitation services can help them return to work sooner.
“As a result, protection insurance benefits individuals and employers, and relieves the burden on the state, helping the economy to grow.”
Though people do not like to think about losing their income, protection insurance such as mortgage protection cover and critical illness cover ensures that mortgage payments and other living expenses are covered if there is no income due to illness or a serious accident.