COVID-19 ‘Drives Popularity Of Income Protection Insurance - QuoteLifeCover.com

Posted by Liz Seyi on April 4th, 2022

It is not exactly news that the coronavirus crisis has profoundly altered the ways in which many of us think about our lives and our health. Now, however, we are beginning to see statistics emerge that help illustrate this, including with regard to sales of income protection cover.

According to data recently released by the London-based analytics and consulting firm GlobalData, more than half (52%) of respondents to its 2020-21 UK Insurance Consumer Surveys said the pandemic had influenced their decision to buy income protection insurance during 2021. This compared to the 37.4% recorded for this same measure in 2020.

Such a finding should not, of course, surprise anyone given the considerable disruptions brought to people’s personal finances by the pandemic, whether or not the virus directly and personally affected them or their loved ones.

What else is clear from the statistics?

The most frequently purchased type of personal income protection insurance during 2021, the study found, was accident and sickness cover, which accounted for a 44.6% purchase share. The next most popular was comprehensive cover at 39.8%, followed by unemployment protection at 15.6%.

Comprehensive policies are those that don’t just include unemployment cover, but also provide protection in the event of an accident or illness rendering the policyholder unable to work.

“Individuals have become increasingly wary”

Senior insurance analyst at GlobalData, Beatriz Benito, commented about the findings: “Individuals have become increasingly wary about the unprecedented events of the last two years, rethinking how best to protect themselves now and in the future.

“The UK’s furlough scheme prevented mass redundancies, yet many individuals still felt the financial squeeze. Some consumers may feel more vulnerable to job losses and health concerns than in the past and are therefore examining ways of protecting themselves in an uncertain economy.”

Benito also pointed out that soon after the effects of the pandemic began to make themselves felt in the UK, insurers temporarily took their unemployment cover off the market amid fears of an imminent escalation in job losses.

If it wasn’t for insurers making this decision to temporarily suspend the availability of unemployment cover, Benito said, “the proportion of income protection policies accounted for by unemployment cover would be significantly higher today.”