Parents and self-employed to drive rise in protection, advisers predict

Over half (53%) of advisers believe parents with young children will have the biggest need for protection, while 43% said parents starting a family will also potentially benefit from individual protection.

Of the 26.5 million UK households in 2018, 5.4 million had paid towards life insurance but just 0.2 million had some form of income protection, according to figures from the Association of British Insurers.

Over two fifths (45%) of advisers also believe employees with limited access to employee benefits through their current employer are another demographic that could experience a need for individual protection products.

In addition, advisers say the self-employed (39%), small business owners (37%) and gig economy workers (32%) will also have a protection requirement, due to a lack of access to employment benefits like sick pay, holiday pay and redundancy pay.

Mark Hussein, CEO of HSBC Life UK, said: “There is increasing awareness that protection cover is an important investment, both in the short and long term. It is often the case that having children means people think more about the future and consider whether they and their family are appropriately financially protected, should anything happen.

“It is interesting that advisers expect to experience demand from self-employed and gig economy workers. These groups rely on regular work and are unlikely to have the same level of protection offered as those individuals working for an employer offering benefits such as critical illness cover or death in service, so it’s vital that they protect their income. Advisers have an important role to play in helping customers of all demographics to understand the need for greater individual protection.”