28/04/2021

Two-thirds of UK’s working population worried about a loss of earnings through illness, including COVID-19, research from The Exeter shows

Two-thirds of UK’s working population worried about a loss of earnings through illness, including COVID-19, research from The Exeter shows
Two-thirds of UK’s working population worried about a loss of earnings through illness, including COVID-19, research from The Exeter shows

- However, less than one in five (19%) protect their income
- Industry jargon highlighted as a barrier to raising awareness, with just half of adults (52%) saying language used to describe insurance products is easy to understand.

More than two-thirds (67%) of the UK’s working population are worried about a loss of earnings due to injury or illness such as COVID-19, with nearly three in ten (29%) very worried, according to research from health and protection insurer, The Exeter. A further seven out of ten (70%) of the working population say the pandemic has made income security a bigger financial priority.

However, despite these financial concerns, less than one in five (19%) working adults protect their income through insurance, falling to just 9% for self-employed workers, highlighting an alarming lack of knowledge around the value of this type of insurance. Indeed, 23% of those surveyed said they had never heard of income protection and 46% said they were aware of it but did not know what it covered or how it works.

This lack of awareness highlights the need for greater engagement with consumers about their financial protection needs. However, just 7% of adults said they had been approached first by an adviser about their requirements.

Steve Bryan, Director Distribution & Marketing, said:

“With the uncertainty of ongoing restrictions, many people are concerned about the impact on their finances. COVID-19 has shone a spotlight on the financial fragility of the UK’s working population and it’s clear from today’s findings that a significant proportion of people are worried about the impact of the pandemic on their income, especially if they are unable to work due to illness. However, just 19% of working adults currently protect their income with insurance. Lenders and advisers need to be proactively engaging with consumers about their protection needs to make sure everyone gets the cover and security they need.”

The research reveals that one of the main barriers in raising awareness of the importance of protection lies in the technical language and jargon used by the insurance industry. Just half (52%) of those surveyed believe the language used to explain insurance products, such as income protection, is easy to understand.

Of those who already had an income protection policy or had considered purchasing it, more than one in four (26%) found it difficult to understand what the benefit of income protection was, what it covered and when it would pay out. This rose to 32% among employed workers, compared to 20% of self-employed workers.

For those who found income protection difficult to understand, almost half (47%) said it was due to too much technical jargon, while 45% said it was because of unclear explanations of what the policy covered and 42% said it was unclear when or how the policy would pay out.

When asked to consider the term “protection” more widely, 53% of working adults said they associated it with protecting themselves from physical harm and 48% associated the word with legal protection. This highlights the need for the industry to speak plainly to help consumers engage with protection products better and easily understand the benefits and security that insurance can provide.

The research comes as The Exeter launches its new campaign “Let’s talk insurance” to drive change in the industry and break down barriers preventing advisers from having productive discussions with clients about insurance, including the use of language and the impact of unconscious bias.

Steve Bryan concludes:
“The jargon and complex language which the industry is guilty of using is making it much more difficult to raise awareness of protection and means advisers face an uphill battle before they even start talking about insurance with customers. At The Exeter, we’re determined to change this and will be providing practical tools and training to work with advisers to overcome obstacles to having successful protection conversations.”

You can read more about the research and campaign here.

 

Contact

Michelle Saunders, Corporate Communications Manager
D: 01392 261424
E: michelle.saunders@the-exeter.com

Taneesha Pawar, Rostrum
D: 07557 156 967
E: theexeter@rostrum.agency

NOTES TO EDITORS
The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.

* Statistics on the concerns of the self-employed in 2019 have been taken from The Exeter’s Ill-Prepared research which can be found here.

Research Methodology

Research was conducted by Censuswide on behalf of The Exeter. 1,021 working adults, split between those employed by employer and the self-employed, were surveyed in October 2020.

About The Exeter

The Exeter is one of the UK’s leading healthcare and protection insurers. The Exeter is a mutual friendly society, which means it is owned by members and run for their benefit, rather than shareholders. The Exeter, formerly known as the Exeter Friendly Society and Pioneer Friendly Society has been specialising in healthcare and protection for over a century. In 2017, The Exeter launched an innovative new life product called Managed Life for people with one of two health conditions, type 2 diabetes or a high Body Mass Index (BMI).

The Exeter is a trading name of Exeter Friendly Society Limited, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Register number 205309) and is incorporated under the Friendly Societies Act 1992 Register No. 91F with its registered office at Lakeside House, Emperor Way, Exeter, England EX1 3FD.

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