28 June 2019

The changing nature of protection

5 min read

Meera Khanna, Consumer PR Manager
Meera Khanna

Corporate PR Manager - Protection


As traditional triggers for buying protection are happening later in life, new triggers such as starting a new job or receiving a pay rise are becoming more important in the eyes of the consumer, according to Royal London’s 2019 State of the Protection Nation report.

Buying a house and starting a family are recognised as the main triggers for taking out protection by consumers and advisers, but the report reveals that when it comes to the next biggest triggers, consumers and advisers have different perceptions.

Advisers think a friend or relative being ill or dying is the next biggest trigger, however few consumers take out protection for this reason. For consumers a salary increase is the next biggest trigger, with the report finding that this caused one in 10 (12%) people to buy income protection.

Financial resilience

‘Single earners’ are identified as one of the most financially vulnerable consumer groups with the greatest need for protection. This group is made up of 30-49 year olds who live in low-cost housing and have limited savings and pension and retirement provisions.

While single earners are the most sceptical about protection, more than half (52%) said they would last less than three months on their savings or investments if they couldn’t work due to illness or injury. Only 9% of single earners agree that people in employment should consider income protection.

Consumer perceptions

Consumers are most likely to buy life cover in the next five years rather than income protection and critical illness cover, with 18-34 year olds being the most likely to purchase any type of protection.

People think they are more likely to die during their working lives than not be able to work as a result of a serious health condition or long-term sickness. But an average 30 year-old woman is 12 times more likely to be off work ill for two months than die during her working lifetime*.

State of the Protection market

More than half (55%) of advisers believe the cost of living is the most significant perceived threat to the protection market , followed by consumer inertia (50%) and lack of income growth (49%). With less disposable income, consumers could face increased financial risks at the same time as they dismiss the protection solutions they need.

Consumer scepticism is also a major challenge faced by the industry, with a third (33%) of consumers saying they’re sceptical about buying a protection product.

Jennifer Gilchrist, Protection Specialist at Royal London, said:

“Traditional triggers such as buying a house are happening at a much later stage for people, but younger consumers still need protection such as income protection. This research shows there’s an opportunity for advisers to have protection conversations with younger clients to help them get the right cover for their needs.

“The industry still has work to do to tackle consumer scepticism and a lack of confidence in the industry. Cost remains a barrier to buying protection, especially for those who are more financially vulnerable such as renters.  Advisers and providers need to find a way to engage with those who are least able to deal with financial shocks and show them the value of advice and the importance of protecting their incomes.”

Notes to editors:

1. Opinium Research surveyed 2,005 nationally representative UK adults (aged 18+) and 202 advisers. The results have been weighted to nationally representative criteria.

2. The consumer confidence index focuses on consumers’ awareness, usage and confidence of the protection. The Adviser Index takes into account advisers’ perceived relevance of protection products and their ability to meet or adapt to consumers’ needs.

3. *Pacific Life Re, March 2018. These figures have been produced based on their interpretation of the Institute and Faculty of Actuaries’ Continuous Mortality Investigation insured lives incidence rates together with their estimated view of future trends. Incidence rates for the entire population may be different to those lives that take out insurance products.

4. The full report can be found here: https://adviser.royallondon.com/globalassets/docs/protection/state-of-protection-nation.pdf

For further information please contact:

Meera Khanna, Corporate PR Manager - Protection

About Royal London:

Royal London is the largest mutual life insurance, pensions and investment company in the UK, with assets under management of £139 billion, 8.6 million policies in force and 4,348 employees. Figures quoted are as at 30 June 2020.