While we are a nation of dedicated pet lovers in the UK, it seems a little incongruous that two times as many Brit’s insure their pets and their mobile phones before they insure their own income.
There is also a very clear North-South divide with Scots doing better than the South in terms of protecting their incomes and families. This is quite simply put down to the fact that Scots are more likely to be home-owners than those in the South and South East of the UK. For example, people in London are far more likely to rent due to high house prices.
The Findings – Scottish Widows Consumer Protection Report
In Scotland people are more likely to take out critical illness insurance, and just more than 54% of Scots also have life insurance (such as mortgage term life assurance); compared to 44% which is the UK average. It is also believed that they are more aware of these products and have been prompted to purchase insurance because, again, more homes are owned.
However, all justification aside; it has also been found that British consumers are highly aware of how important life insurance actually is. According to British consumers, high-speed broadband and mobile phones are still considered to be essential costs while Life Insurance is perceived to be a luxury.
The South and South East areas of the UK have the lowest take-up of life insurance with only 41% of adults ever having purchased a product. Northern Ireland is relatively higher at 48%. Critical illness and income protection percentages in Northern Ireland stand at 12% and 10% respectively, while Welsh residents have the worst reputation of the lot. It was found that critical illness insurance take-up in Wales is only 10%, while income protection is way down at 5%.
The percentage of people who insure their Border Collies and iPhones relative to income is showing insurance providers a worrying trend. Certainly while 15% of people are purchasing insurance for their pets, only 7% are insuring their income. So if pussy gets poorly, she will be taken care of, but if mum or dad get taken ill, there is going to be no more food in pussy’s bowl.
A Very Worrying Finding
The trend follows through with the ‘I can’t live without my mobile phone’, as 13% of all people in the UK who take out insurance, are insuring these phones. What is really strange is that mobile phones are most often perceived to be a status symbol – one would certainly believe that ones earning ability should at least be perceived to be equal? But it is not!
The most important aspect regarding income protection insurance is the fact that it protects our current lifestyle. But still only 7% of consumers in the UK believe it is important to insure their lifestyle.
The results of the Scottish Widows research report also revealed that British consumers do review their finances a couple of times a year, but protection take-up is low, despite good awareness of the products. Awareness levels for life insurance in the UK is 97%, only 44% have it; for critical illness, awareness is 86% – only 12% have cover, and for income protection 83% know about it and, as we have said previously, only 7% have cover.
What does seem to be a big problem is that despite the fact that consumers clearly understand the benefits they do not take up these insurance products as they believe they cannot afford them or ‘it won’t happen to me’, and this is also cause for concern.