Advisers expecting rise in individual protection demand

Financial advisers believe that an increased demand for individual protection products will come from parents with young families, according to new HSBC Life UK research.

A majority 53% of 108 independent advisers surveyed highlighted that parents with young children will have the biggest need for protection, while parents starting a family will also potentially benefit from individual protection, 43% of financial advisers revealed.

A significant number of households are under protected individually, according to the Association of British Insurers. 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.

The research found that it isn’t just families which could benefit from protection, with 45% of advisers believing employees with limited access to employee benefits through their current employer are another demographic that could experience a need for individual protection products.

HSBC Life UK suggested the self-employed (39%), small business owners (37%) and gig economy workers (32%) will also have a protection requirement, likely to be due to a lack of access to employment benefits like sick pay, holiday pay and redundancy pay.

“There is increasing awareness that protection cover is an important investment, both in the short and long-term,” HSBC Life UK CEO, Mark Hussein, commented. “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.”

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