Figures released by Swiss Life have revealed a staggering two-thirds of people in employment would b...
Figures released by Swiss Life have revealed a staggering two-thirds of people in employment would be incapable of meeting regular financial commitments if they were unable to work for more than six months.
A total of 23% would be unable to cope after one month of prolonged illness with a further 25% admitting they would struggle after three months.
Although the findings illustrate the importance of income protection (IP) cover, only 8% of those surveyed considered IP to be the most important form of protection. Instead, life assurance was regarded as most important by 28% of survey respondents, followed closely by household insurance with 26%.
When questioned on the main source of income used to fund their long-term absence from work, 34% of those surveyed said they would be reliant on Government support.
One quarter said their savings would be their main source of income despite research from the Department for Work and Pensions showing around a half of all households have less than £1,500 in savings. Only 8% would rely on an IP policy as the main source of regular income.
Swiss Life's research and planning manager, Rosalind Pearson, said the findings illustrate a need for increased consumer awareness of IP cover. 'When it comes to considering the possibility of long-term illness and making appropriate provisions people tend to bury their heads in the sand, although many are well aware that their standards of living would be severely affected should the worst occur,' she said.
IP specialist Diane Saunders, principal of Diane Saunders IFA, said the research findings were astounding and highlighted a need for clear advice and greater responsibility from advisers and clients alike.
'The importance of next month's income needs to be brought to the fore,' she said.
