Research from investment, protection and retirement specialists LV= has explored attitudes to income protection to coincide with Income Protection Awareness Week (IPAW).
Although 42% of UK adults who own a protection product experienced a change in circumstances such as a new job or having a child, only around a quarter (28%) asked their financial adviser if they needed to adjust their protection cover.
The Wealth and Wellbeing Research Programme* – a study of 4,000 UK adults – reveals:
As household priorities shift over the years, it is important to review protection policies to see if they can better support any life events or job changes. Any changes to work, family planning or relationship status could mean that an existing income protection plan may no longer be fit for purpose. Many people would not think of this despite being at risk of losing their home if they experienced a financial shock.
It has been five years since Parent and Child cover was included with all new LV= Income Protection policies in 2018. This feature pays a lump sum if a parent needs to care for a child because they had an operation/medical procedure or are diagnosed with a specific illness. This benefit covers 54 conditions and LV= will pay six times the monthly cover amount up to a maximum of £25,000 per claim**. The money paid could allow customers to take unpaid leave from work to care for their child, or cover costs associated with medical treatment.
In 2022, LV= paid six Parent and Child Cover claims, totalling over £47,000. The most common condition for claims was cancer, followed by stroke and organ transplant.
“Our latest research found that a concerning number do not consider changing their protection cover when experiencing important life changes. When applying for protection cover, many people focus on the here and now, but it is important not to get caught out as families continue to grow in the future.
“Family dynamics are diverse and constantly changing. For example, one in ten parents aged 35-54 live in a ‘blended’ family household supporting children from a previous relationship. As more people depend on household income, it is important to review your protection cover regularly with your adviser so that a sufficient financial safety net is in place.
“We are very proud of our work in introducing LV= Parent and Child cover into the protection market and will continue to equip advisers with more choice to offer tailored solutions for their clients. Being able to offer this level of support when customers need it most will make a real difference to them and their families.”
Notes to Editors
*LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium in June 2023
UK population stats from ONS. Total UK adult population is 53.2m UK adults (aged 18+).
** The Parent and Child cover feature is only available on new LV=Income protection policies taken out since the feature was introduced. It is not available on any other LV= policy. The cover pays out one per child per policy.
LV= is one of the leading life and pensions mutual insurers, serving over 1 million members and customers across the UK. As a protection, investment and retirement specialist, LV= offers a range of products, services and advice to help members and customers protect their income while they’re working and maximise it when they stop.
LV= and Liverpool Victoria are registered trademarks of Liverpool Victoria Financial Services Limited (LVFS) and trading styles of the LV= Group of Companies. Liverpool Victoria Financial Services Limited, registered in England with registration number 12383237 is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, register number 110035. Registered address: County Gates, Bournemouth, BH1 2NF.