Who's buying income protection?
If you’re currently comparing income protection quotes, you’re far from alone. The spike in income cover enquiries we reported earlier this year continues, with thousands of you using our website to find the right policy for you.
Ongoing uncertainty around Brexit and the impact on the UK economy is thought to be one of the main drivers behind the interest in income and redundancy cover. Latest figures from the Office for National Statistics show that, after falling since 2013, unemployment in the UK has started to level off in the last quarter, while job losses have hit the car and steel industries hard in 2019.
So just who is behind the rise in income protection enquiries? Read on!
What is income protection insurance?
Income protection (IP) is a type of insurance that gives you a monthly payment if you’re unable to work due to sickness, an accident or involuntary redundancy. You can choose between short term income cover or long term income protection and can include cover of up to 70% of your gross monthly salary, straight into your bank account.
Which type of income protection do I need?
There is a range of income cover options, including mortgage payment protection and loan repayment cover. By far the most popular, however, is standard income protection, with 81% of our customers comparing quotes for a general policy. The benefit of general income protection insurance is that it can be used to pay for the lifestyle expenses you choose - be they household bills, food shopping or the mortgage or rent - with no stipulations as to how you spend it.
Income Protection for your job
Three quarters (75%) of policyholders want the cover to last until they retire, with a quarter opting for fixed-term income protection. And if you think our ‘typical’ income cover customer is a suit-wearing high-earner, think again, as, interestingly, workers in all income brackets recognise its value.
The largest percentage - 37% - of those making enquiries earn less than £30,000 per year. Nearly a quarter (24%) earn between £30,000 and £40,000, while just 12% of our income protection customers earn more than £70,000.
Project and programme managers head up the list of workers comparing income protection quotes, with accountants, admin staff and managers next. HGV drivers also make it into the top five jobs searching for this type of insurance.
Income protection for homeowners
Perhaps unsurprisingly, almost three quarters (73%) of our income protection enquiries come from homeowners with a mortgage, as this is typically a household’s largest expense and needs safeguarding. Nineteen percent rent their home, while three percent own their home outright.
If you’re among the one in six people who get in touch with us and who smoke, you may want to know that this can make a difference to the cost of your premiums. Our guide to giving up smoking could help!
Life insurance and critical illness cover
Younger workers aged between 25 and 34 are increasingly asking us about income protection while, at the same time, making fewer life insurance comparisons, suggesting that they are more concerned with the ‘here and now’ than longer-term financial planning.
Worryingly, our own research and figures from the wider insurance industry show that men are more likely to take out protection insurance than women. Last year, we revealed a ‘gender guarantee gap’ showing that a third of men have critical illness cover in place, compared to just one in five women.
And our partners Scottish Widows also revealed that 60% of women with dependent children have no life insurance in place, leaving their families in a vulnerable position if the worst were to happen. Despite an increase in families where the woman earns more - as well as the contribution of mothers to home life - women are still failing to put in place cover to safeguard their family’s financial future.
ActiveQuote is one of the UK’s leading comparison sites, working with Confused.com, Gocompare, uSwitch and MoneySuperMarket to bring our customers the best cover at the right price. We offer free, impartial and specialist advice over the phone - to find out more, call us on 0800 862 0373.