A recent research has warned that UK adults are putting themselves at financial risk by not taking advice and purchasing suitable protection against illness or disability.
The current protection product distribution is inadequate, found a study by CWC Research carried out among UK intermediaries, with a majority of respondents saying sentiments have been damaged by past mis-selling of protection product scandals.
The biggest gap in protection was found among the younger generation, but advisers seem to be focused on ‘baby boomers’.
“The problem is that millions of people should have income protection but they believe they will not need it,” said Clive Waller, managing director of CWC Research.
“They understand the risk of getting older or getting cancer, for example, but have not thought about the chances of developing a back problem or a heart condition that might put them out of work,” he observed about the younger generation.
“Unfortunately illnesses and disabilities are not uncommon and can cause havoc to a person’s financial situation so an appropriate protection policy is important,” he added.
The CWC Research report called on the government to create an environment where protection sales, particularly disability products gets a boost and urged for significant changes in the nature of application and distribution.
The governments plans to slash welfare budgets together with the Retail Distribution Review (RDR) is likely to achieve better protection sales.
“Many people believe that the state will pay if they are no longer able to work but this is not true. Now the government has vowed to cut benefits, people are starting to realise they need to be protected,” said Mr. Waller.
“The nature of distribution takes little account for the needs of product manufacturers or customers. Everyone knows it can be done so much better, but no one is willing to be the first mover. RDR will almost certainly be the driver,” he added.