Income Protection  

Millennials most likely to want income protection

Millennials most likely to want income protection

Millennials are the age group most likely to want income protection, research has shown.

Canada Life polled 1,002 working adults in April and found that more than a quarter (28 per cent) of those aged 18-34, typically called millennials, thought group income protection would be the most useful protection product an employer could offer.

By comparison, only 13 per cent of over 35s thought group income protection was the most valuable employer offering.

Across all age groups, 17 per cent of people believed in the value of such policies while 13 per cent preferred group critical illness.

Income protection products pay out a percentage of the holder’s salary on a monthly basis if unable to work, while critical illness products give the consumer a lump sum on the diagnosis of selected illnesses.

The survey, published on Wednesday (July 10), targeted those who expect to work beyond 65 to ascertain which protection products appealed the most.

It found that almost half (44 per cent) of those aged 55 and above were unsure about which benefits would be most useful as they prepared to work beyond the traditional retirement age.

According to Canada Life, this highlighted that employers and the group insurance industry could do more to educate this age group on the options available to them.

Group protection, which is taken out by employers to protect their employees against unexpected ‘bumps in the road’, has been a growing market over the past year but protection specialists argue more could be done to expand the industry.

Earlier this year advisers were urged to focus less on price and terms and conditions and to look at the value added services group protection can offer when explaining the products to their corporate clients.

For example, group income protection policies often include quick access to counselling and GP services as well as second medical opinions and get back to work schemes.

According to Canada Life's research there is a "huge opportunity" for employers to provide group benefits.

ONS labour statistics showed that the 17 per cent of people who expect to work beyond age 65 and believe group income protection would be the most useful benefit translated to approximately 4m workers — but only 2.5m currently receive such benefits from their employer.

This means there is a pool of at least 1.5m employees in the UK who understand the value of such protection but are underserved in this department by their workplace, according to Canada Life.

The research showed a similar picture for group critical illness. Of the 13 per cent of employees expected to work beyond 65 who back group critical illness as the top product — which make up about 3m employees — currently only about 600,000 have access to it. 

Paul Avis, marketing director of Canada Life Group Insurance, said: "There has been a consistent narrative in recent years that employees do not understand the value of employee benefits, especially ones like group income protection.