The Covid-19 pandemic saw a huge surge in people looking for long-term Income Protection (IP) cover as they panicked about the prospect of losing jobs during the crisis - but pre-Coronavirus levels have now been brought rapidly back into demand, we can reveal.
Whereas the average term for customers looking to secure policies dipped by around three years at the start of the outbreak in March, our figures show that it rose by around 2.5 years to just over 19 in April as panic-buying subsided.
ActiveQuote’s Head of Partnerships, Rod Jones, says this is good news for providers who have been advising about the long-term benefits of Income Protection and the importance of not waiting until a crisis to put a policy in place.
He says: “Like any protection policy, maximising the cover available to you relies heavily on putting cover in place at a time in your life when you’re fit and healthy, and able to work, rather than waiting until something goes wrong and trying to seek assistance then.
“We saw a huge surge in the number of people looking to take out short-term IP cover at the same time Covid-19 arrived in the UK, with overall enquiries surging by as much as 1100%, which wasn’t entirely unexpected given conventional consumer attitudes to IP generally,” Rod continued.
“The hope now amongst insurers is that the rapid resurgence in longer term cover which has emerged since continues its upward trajectory, and that the message around the longer- term benefits IP can bring is finally beginning to sink in on a much broader basis.”
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.
However, since the pandemic, insurers are no longer able to offer unemployment cover.
Rod says the Covid-19 crisis is a stark reminder that it’s a necessity to have a good Income Protection policy in place.
Rod says: “We may be in unprecedented times in terms of the scale on which employees across the country have been affected by Coronavirus, but the possibility that any one of us may become unable to earn a living for a wide range of unexpected reasons is always there.
“It is not only the case here that those with long-term IP policies already in place when the pandemic hit are most likely to have come off the best in terms of their right to claim – it is always the case.
“The fact the average term of cover requested has risen to pre-Covid levels so rapidly would certainly suggest a turn in the tide when it comes to conventional attitudes to IP.”
With the benefits of IP clearly seen during these unprecedented times, we hope consumers can finally begin to put IP in place as a matter of course, alongside other domestic policies.
To find the right cover for you at this difficult time, compare income protection quotes on our website.