Getting insurance or protection is a great way to make sure you’re financially protected when the unexpected happens – but it can often be misunderstood. Here are the top five protection myths, and why they’re simply not true (based on research by LV=)
Protection sounds like a good thing, right? And it really is.
Protection is a type of insurance for your money when something unexpected happens, and you aren’t able to financially support yourself. It can really help you through tough times, and help you get back on your feet.
But for many reasons, protection seems to have a bad rep these days, and recent research by LV= has found that 73% of UK adults under the age of 65 don’t have any protection – so we dug a bit deeper, and found that protection is simply misunderstood by many!
Here are the top 5 reasons why people with no protection don’t have protection, and why those reasons simply don’t hold true.
34% say they don’t have cover because it’s too expensive
One of the most common misconceptions – it just costs too much and you can’t afford it? Well, let me tell you something, it probably costs lesser than that Deliveroo you got last night because you couldn’t be asked to heat up some leftover pasta.
The cost of protection does vary, but it could start from as low as £14 per month, and the younger you are, the cheaper it is!
Also, all those people who’re saying it’s too expensive? Well… 7 out 10 of them have never even received a quote – do your research folks!
14% say they can rely on their savings
According to Finder, the average person in the UK had £6,757 saved and 1 in 3 had less than £600 – if something were to happen to you (God forbid), would that be enough to cover expenses like your rent or mortgage, weekly shops or even medical bills if any?
I mean, wouldn’t you rather use your savings on something you’ve been looking forward to – like a holiday, or travelling, or a new car, or literally anything else other than day-to-day expenses?!
14% don’t trust that insurers will pay
Insurers paid 98% of all claims in 2020 – do I need to say more?
According to ABI, insurers paid a whopping £17 million equivalent per day in 2020 to help people and their families through financial difficulties, including due to mental health issues – because they had insurance.
25% say they don’t understand protection to buy it
Young adults were more likely to say that they don’t know enough about protection (28% of men 18-34 and 35% women 18-34). The LV= Wealth and Wellbeing Monitor also shows many people didn’t think protection was suitable for them, don’t find it easy to understand, don’t think they’ll be eligible or don’t know if they could even get cover for their existing conditions.
This is where a financial adviser could help you – they’ll be able to give you a clearer understanding of what protection is right for you and how you could buy it. Get in touch with a financial adviser.
“I’m young / healthy / don’t need protection”
Mate, even superheroes mess up sometimes, and it’s not necessarily their fault.
You can’t always predict what happens to you. No one likes to think about it, but what if you had an injury, or fell ill? Think about COVID-19 – pretty much everyone you know has got it at least once, right? And at some point, we all thought we’d be fine.
And you don’t always know the risks that could lie ahead of you. Try our Risk Reality Calculator – answer a few simple questions and you can see what risks you could potentially face.
One of the simplest ways to start protection yourself is through Income Protection Insurance. It’s super affordable, and basically replaces your income if you can’t work due to illness or injury. So if for one of those reasons, you couldn’t work and bring in income, it would replace 50% to 70% of your what you earn – basically enough to cover your daily expenses and rent and bills.
Many people have their own opinion about protection, and fair enough. But what doesn’t work for them could really benefit you, and protection is definitely one of those things.
Life could throw anything at you, and you wouldn’t see it coming – but at least protection can help soften the blow.