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The Latest Trends in Personal Protection
Staying on top of trends is important when it comes to protection insurance, as this helps both employers and individuals to understand the value and relevance of their cover. The COVID-19 pandemic has seen a sharp increase in enquiries and uptake of many types of protection insurance with income protection sitting firmly at the centre of it all.
Specifically, the industry has witnessed a strong trend with regards to young people where income protection has become more popular with the under-25s. A report from Cover magazine shows that IP enquiries made via the ActiveQuote site increased by more than 400%, by more than 300% from those under 30 and by more than 250% for under 35s in March 2020, compared to the same time last year. Cover also reports that the protection broker and comparison service “saw the number of enquiries from customers aged 20 and under rise five-fold during the same period.”
With employers often coming up against a barrier to uptake with this age range, due to the “it will never happen to me” mentality, this trend is another sign of how the pandemic has given many people a wake-up call. These figures mark a noticeable shift where protection insurance is now being viewed as less an option and more a necessity. Younger people have become far more aware of the need to protect themselves sooner than originally anticipated, with IP traditionally considered for the first time by those in their early 40s.
Long-term Income Protection
Another positive aspect of this trend is that it shows how people are seriously starting to prioritise financial resilience. Establishing good protection insurance and safeguards earlier on in the career and lifecycle is likely to bring a far wider and more valuable range of benefits to the individual and their families.
The unprecedented events of COVID-19 have seen people of all ages and financial situations re-evaluate their lives from a number of perspectives. This has led to a clearer understanding of how financial security with a long-term focus should be a priority. Income protection fits neatly into this need as it is a long-term plan designed as a partial salary/income replacement if the individual is unable to work due to sickness or disability.
Practically all of us have been financially impacted to some degree by the events of 2020, proving that – without adequate protection – nobody’s financial position or that of their loved ones is truly safe.
A New Type of Challenge
For younger people, understanding the importance of financial resilience early on in their career is invaluable. This generation is less likely to have substantial investments or excess cash, which makes it all the more essential to set things up in the most effective way to protect against unexpected events that can take place at any time.
Many people are also considering their earnings from a sustainability perspective; the under-25s are part of a generation that is increasingly choosing to set up their own small business or set themselves up as self-employed. These are all positions that are often more challenging to maintain and more vulnerable to collapse or financial struggles against a tough economic landscape such as COVID-19.
As restrictions are growing tighter by the day and the economy braces itself for a second wave of the virus, we should again consider the financial sustainability question. We all need to think about whether the provisions we put in place the first time round will still protect us – for example, another pay cut may prove calamitous.
We have already seen that the virus does not significantly discriminate by age, which means that we all need to consider the impact on our short- and long-term financial health. This should not only be a prime concern for those of us with underlying health conditions or those that fall into a vulnerable category, but also for these younger generations for whom even a short workplace absence may mean significant financial distress and depleted savings.
As time goes on and we see more and more the impact of Long Covid, the issue of income sustainability and protection becomes ever more urgent.
Tailored Personal Protection
As a flexible type of protection insurance, income protection can be tailored to fit a range of budgets, occupations, and personal circumstances to provide every individual with the very best value from their cover.
Protection typically covers general living costs for peace of mind and a priceless lifeline when times get tough. For advice on the best income protection options for you and your family, contact our team at Vintage Wealth Management today.
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