Published on 30/11/2012
Negative stories about payment protection insurance (PPI) are putting people off investing in income protection insurance, according to a new survey.
Payment protection insurance is designed to cover the repayments of a specific debt for up to 12 months if you are unable to meet the financial commitment due to accident, sickness or unemployment.
A recent investigation by the Financial Services Authority (FSA) discovered widespread mis-selling of PPI in the UK. Consequently, the product has received a lot of negative press.
In contrast, income protection insurance is designed to pay you a regular tax free monthly income if you are unable to work due to illness or injury, potentially until retirement age.
Despite PPI and income protection being completely different products, a new survey by Cirencester Friendly has shown that the two are often being confused.
Over three quarters of questioned financial advisers believe their customers mistake income protection insurance with PPI.
And 58 per cent would like the government to raise awareness of income protection insurance to prevent consumers being wary of all protection products.
Paul Hudson, chief Executive of the Cirencester Friendly, said: "The results of this survey confirmed a lack of awareness amongst consumers. While the benefit of income protection is a common topic in the media, the message rarely makes it into the wider public domain.
“If we want to ensure that the working population of the UK understands how to protect themselves.”
© ActiveQuote Ltd. 2012Categories: Income Protection