Research conducted by Cirencester Friendly said over 79% of financial advisers believed that their clients confused income protection with payment protection insurance while 63% said on the whole their clients weren’t clear on what income protection was.
Paul Hudson, chief executive of the mutual, said: “Unsurprisingly negative press around the PPI product has made consumers more wary of protection products and more needs to be done to educate consumers on the differences between PPI and other protection products in the market.”
Hudson added: “Income protection does what it says on the tin. It covers a person’s income should they be unable to work and earn a living due to illness or injury providing a regular income to cover bills and the cost of living.
“Changes to the state benefits system and the way eligibility is being assessed should bring the need for individuals to ensure they are adequately protecting themselves and their families into sharp focus. Yet the industry continues to experience declines in the sale of new individual income protection contracts in the UK.”
Of those surveyed 62% believed that better educated consumers would encourage them to sell more income protection products and over half of those asked called for the industry and the government to lead the campaign to raise awareness of the product.
Hudson said: “While the benefit of income protection is a common topic in the media the message rarely makes it into the wider public domain. If we want to ensure that the working population of the UK understands how to protect themselves this needs to improve.”
