Gig workers, renters, the self-employed, single parents – it’s an unfortunate reality that when it comes to life protection, those that need it the most are the least likely to have access to, or means of, support.
Over 130 million working days are lost annually due to sickness or injury in the UK.
While we take the odd day off work for granted, many of us would rather not face the thought of long-term illness or injury. However, the prospect of being out of work and without a regular income is a reality we must all be prepared for - however unlikely it may seem.
Family dynamics in the UK are changing and the number of single parent families has increased to 2.8 million.
Many of these are reliant on a single breadwinner, which makes single parent families one of the groups which are particularly vulnerable, should that individual be unable to work.
Advisers may already be working with clients with families, who decide that they need to divorce. UK couples spend over £14,500 on average when they divorce or separate.
This can impact on savings that parents may otherwise have used as a safety net, and can lead to newly divorced people entering the rental market and working longer hours – both factors which increase the need for income protection.
Divorce can often be a trigger point for reviewing the finances of both partners and looking at the increased need for protection.
And in these cases, income protection can provide valuable financial security, making sure newly-single parents and their children are supported should ill health mean they can not work.
Over-reliance on savings and state support
Saving for a rainy day is the go-to strategy for many looking to insulate themselves from unplanned financial hardship. However, relying purely on savings can be a risky strategy.
Absence from the workplace due to illness can last for months or even years - meaning even the healthiest saving pots can quickly diminish.
When families fall on hard times, the state can also provide a vital safety net.
While few would argue that the government provides immediate and invaluable support, advisers can remind clients that this support may not be enough in the long-term, and may not fully cover some of their most significant – and expensive – financial commitments.
Indeed, having income protection in place can mean something as fundamentally important as the family being able to keep their home.
As support for mortgage interest from the state is now a loan, and there are caps on housing benefit to cover rent, income protection can help plug these gaps.
And while it is important to remember that income protection is factored into means-tested benefits, the additional level of income that it can offer, and the array of additional benefits
that many policies offer, makes it well-worth considering.