New research has uncovered an alarming trend which could leave many people struggling to pay their bills if they were unable to work due to illness or injury.
LV’s fourth Reaching Resilience Report found that more people in the UK have pet insurance than safeguard their income.
Indeed, a third of workers have pet cover compared to a quarter holding income protection, with the same level covered for critical illness. Fewer people also have their life insured at 29%, according to LV.
The research claims that this means almost half (43%) of the UK’s workforce do not hold any health or income protection products.
It’s complicated
Rather than a lack of interest in protection, the findings could reflect the uncertainty felt by workers around their needs.
“People often feel in control of their health and therefore underestimate the need to have a policy like income protection,” said Fiona Wynn, Royal London’s head of protection proposition.
“General insurances, like pet insurance, can feel more tangible,” she added. “Customers can interact with the benefits of it directly.”
Justin Harper, chief marketing officer at LifeSearch, described pet insurance as straightforward. “I know the financial risk of taking my pet to the vet.
“It is more concrete and immediate than what would happen if I couldn’t work for years,” he added. “The financial risk of pets is clearer and more tangible.”
One example is that protection products have different variables. “You might not know what type of cover you need, where to set the level or how to access it,” Harper said.
“It is riddled with complication compared to what is the rate card [for pet insurance] on a comparison site,” he added.
For Wynn, improving the level of protection cover is about making such products as accessible as possible. “Income protection is an advised product as opposed to something that is brought direct.”
She added that the industry also needs to make such policies easier to understand, which means supporting advisers, so they have the right tools to explain the value of protection insurance to consumers.
“Pet insurance is quite Ronseal, whereas the benefits of income protection are less easy to understand,” she said.
LV’s protection proposition director, Gary Beyer, said while it is important for people to have protection for their pets, it is vital they also safeguard their health and income.
“The protection gap remains significant, and advisers will continue to be central to helping households navigate uncertainty and improve financial resilience,” he said.
Gender gap
The research highlighted another issue. While the uptake of pet insurance is consistent across genders at 33%, men are more likely to have health and protection products.
Indeed, men have more income protection than women at 28% versus 22%, and critical illness cover at 27% versus 23%.
This is also evident in life insurance where 31% of men have such a policy compared to 26% of women, while private health cover is 32% versus 26% in favour of men.
For Wynn, gender disparity is not just about who holds such policies, but also around the amount insured.
This could reflect that some women take career breaks and the gender pay gap, but having more female advisers could help.
“A lot of female advisers do a good job in making the advice experience less intimidating for women to access advice,” Wynn said.
