UK adults do not fully understand financial protection products including income protection, critical illness cover and family income benefit, according to research from MetLife UK.
The research, which explores consumer views of financial protection in a Covid-19 world, found almost one in five had never heard of income protection, while one in six (17 per cent) had never heard of mortgage payment cover protection.
Almost the same number (16 per cent) were unaware of what critical illness cover was.
Although some UK adults said they had heard of such products, many admitted that they still did not understand what the respective product actually covers.
One in five (18 per cent) said they’d heard of critical illness cover, but they did not understand what it covers, with the same for income protection (20 per cent).
Rich Horner, head of individual protection at MetLife, said: “Financial protection products are often overlooked as a non-tangible product that you won’t ever need. Because let’s face it, no one wants to think about falling ill, having an accident, passing away and so on. But unfortunately, the reality is that the unexpected can and does happen.
“The issue for consumers is two-fold. Not understanding what is available and what it covers, and associated costs. By having the right financial protection in place, it can help alleviate some of the stress and worry that not having anything in place often brings.”
The study, which asked 2,000 UK adults in June 2021, also found that one in six (16 per cent) of those questioned had previously needed a protection policy, but did not have one in place.
About three-quarters (73 per cent) of workers said they had worried about having to take time off work due to illness or injury since the pandemic started, of which 30 per cent worried more than they previously did.
Horner said: “As a provider, we all have a role to play to help consumers understand what products are on the market and importantly, what it covers. Often there are misconceptions that products are expensive and then when needed do not pay out but that’s simply not true.
“I’d urge consumers to see what is out there and get in touch with providers or their financial adviser to ask any questions. This can help them better understand how to protect what is most important to them via valuable insurance policies and help to put plans in place for the future.”
The research also showed a quarter (25 per cent) of consumers said their job comes with an associated risk of injury, with separate research from MetLife UK finding more than a third (34 per cent) have had to take four weeks or more off work due to an accident or illness.
Of this, nearly half (47 per cent) admitted they needed financial support to help them with their mortgage repayments.
sonia.rach@ft.com
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