More than 8m 22-44 year-olds are considering income protection and 7 per cent of this age group have acquired a protection product in the last three months, according to research from protection specialist LV=.
LV=’s Wealth and Wellbeing Monitor, which tracks the behaviour of 4,000 UK consumers, found 40 per cent of 25-44 year-olds with no life cover are now considering life assurance, as understanding of the value of protection grows in response to the coronavirus pandemic.
But 19 per cent of those in this group without IP cover say they have never heard of income protection insurance, and 14 per cent of those without life cover are unaware of life assurance.
The research finds that 25-44 year olds are more likely than older age groups to be struggling with the financial repercussions of the second coronavirus lockdown. Many are also pessimistic about the outlook for their finances, with 44 per cent of 25-44 year olds saying their finances were worse than three months ago, compared to 36 per cent of UK adults of all ages, with only 12% saying they were better.
The research also found 30 per cent of 25-44 year olds expect their finances to worsen over the next three months, compared to 26 per cent of UK adults of all ages, while 14 per cent expect it to improve.
Debbie Kennedy, Protection Director at LV=, said: “The pandemic, lockdowns and furlough has caused a huge amount of financial damage to millions of households who are worried about maintaining a steady income.
“The challenges of the coronavirus pandemic and further lockdowns have forced people to re-evaluate their priorities and spending habits to tackle short-term instability. People are now more aware of the vital importance of their income and the vulnerability of their finances. It is encouraging to see more people interested in protecting their income, and how this is becoming more important than traditional life insurance for younger people.
“LV= continues to promote the importance of protecting income through our own efforts, through collective action with the Income Protection Task Force and by supporting financial advisers.
“We should be educating the wider public as an industry about protecting income and the added benefits included when taking out a protection policy, going the extra mile to provide financial and emotional support to those that need it.”