Despite 42% of UK adults with protection products experiencing significant life changes, only 28% consulted their financial adviser to review their cover, according to LV= research.
For the study, LV= surveyed 4,000 people from across the UK to explore attitudes to income protection via an online omnibus conducted by Opinium in June 2023. The release of the research coincides with Income Protection Awareness Week (IPAW).
Over a third of protection policyholders who experienced a major life change, such as having a growing family or a new job, had not considered whether they needed to adjust their protection coverage.
And women were less likely than men to consider making changes, with a rate of 46% for women, compared to 26% for men.
In total, only 19% made adjustments to their cover, despite experiencing that change in their circumstances.
The study found that one in 10 UK adults with a protection product had experienced welcoming a child or had changed jobs since taking out their cover. In both cases, this is more likely for 18-34 year olds, compared to other age groups.
“As household priorities shift over the years, it is important to review protection policies to see if they can better support any life events or job changes,” LV= pointed out
“Any changes to work, family planning or relationship status could mean that an existing income protection plan may no longer be fit for purpose. Many people would not think of this despite being at risk of losing their home if they experienced a financial shock,” it added.
Mike Farrell, protection sales and marketing director at LV=, said: “Our latest research found that a concerning number do not consider changing their protection cover when experiencing important life changes.
“When applying for protection cover, many people focus on the here and now, but it is important not to get caught out as families continue to grow in the future.
“Family dynamics are diverse and constantly changing. For example, one in 10 parents aged 35-54 live in a ‘blended’ family household supporting children from a previous relationship.
“As more people depend on household income, it is important to review your protection cover regularly with your adviser so that a sufficient financial safety net is in place.
“We are very proud of our work in introducing LV= Parent and Child cover into the protection market and will continue to equip advisers with more choice to offer tailored solutions for their clients. Being able to offer this level of support when customers need it most will make a real difference to them and their families.”