Under-25s buying Income Protection (IP) policies has risen dramatically during the Covid-19 crisis, we can reveal.
Our new data shows that five times more under-20s have been enquiring about IP than usual during the pandemic.
Enquiries via ActiveQuote for IP from those under 25 rose by a massive 400%, with 300% more for the under-30s and more than 250% for those under 35 in March, compared to figures at the same time last year.
Overall, customers enquiring about IP were two years younger on average in March 2020 than they were in February – which represents the biggest month on month decrease in over 14 months, and is four years younger than at the beginning of the same period.
ActiveQuote’s Head of Partnerships, Rod Jones, says the pandemic has made younger people far more aware of the need for IP when it’s traditionally something consumers in their early 40s look to consider.
He says: “Since the pandemic hit in early March the average profile of enquirer has been edging closer to the mid-30s. The average age of a would-be policy holder has been growing steadily younger since January 2019 but dropped by two years in March this year alone, after the outbreak of Covid-19 and subsequent lockdown was confirmed here in the UK.”
This significant margin could be an indication that the outbreak has pushed a new generation of employees into appreciating the need to protect themselves sooner than they originally expected.
There are four main types of income protection insurance – mortgage, redundancy, loan and accident and sickness cover – which are available as individual policies or as a package depending on your individual circumstances.
Each policy type is designed to cover a range of general living costs in the event that the policyholder is unable to work for whatever reason.
Our figures show that the average age of those seeking IP cover through ActiveQuote dipped more sharply in March than across the entire 14-month period leading up to it. It then rose again slightly from age 36 to 37 in April, which is still two years younger than the average customer approaching the site for the same reason back in April 2019.
Rod adds: “Like any insurance product, the earlier income protection cover is put in place the greater the benefits it is likely to bring, both to the policy holder and the loved ones many are seeking to protect by acquiring it in the first place.
“Insurers have long been championing the benefits long-term IP can bring and if there are any silver linings to be had from the hardships many are unfortunately experiencing now, it’s that the UK workforce as a whole looks set to be better protected in the future as a result.”