Young, care-free and cover-free?
Have you recently been a holiday abroad, or are you perhaps lucky enough to have one planned for the near future? Do you have holiday insurance?
We’re confident to assume that for most people the answer would be yes.
Indeed, for the vast majority of us, holiday insurance is a no-brainer - what if the luggage gets lost? Or (touch wood) someone takes unwell on holiday. We wouldn’t dream of taking that risk.
YET, many of us will remain unprotected against the bigger risks in life – against the potential of being off work due to sickness or injury, which, in the long run, can have a much more detrimental impact on our finances.
Emma Thomson, head of customer care at Life Search, claims that this is a particularly concerning issues for younger generations who “might think they don’t need protection because many of them don’t yet have a mortgage or children” and may therefore feel that long-term sickness and death are issues for older people.
But it shouldn’t be dismissed.
It’s not uncommon for young people to be off work due to sickness or injury, and when they are, they still need to pay the bills and rent.
And with sick pay through work often much less than people assume, and savings often insufficient/ earmarked for first home etc, Jennifer Gilchrist, proposition lead at Royal London, argues that income protection can be a saving grace.
“It has become more common for younger people to work flexibly, which means fewer people have the security of sick pay or employer-funded benefits such as income protection.”
Mortgages tend to be a major impetus to get life insurance, but with homeownership among millennials low thanks to rising house prices – they’re not called ‘Generation Rent’ for nothing – this means that fewer and fewer millennials are actually seeing a need to purchase life insurance.
A 2017 survey by Drewberry found just 23.3 per cent of those aged 20-29 had life insurance, compared to 41.5 per cent of those aged 40-49.
And whilst millennials may automatically dismiss the option due to smaller amounts of disposable income, it is worth noting that there are options young people can take to satisfy tighter budgets. For example, budget types of IP which pay for a shorter fixed term with a limited payment as Rob May, director at Risk Assured, points out: “Millennials are generally in the wealth building stage of life, with limited financial assets. Products such as limited payment term income protection policies, can provide a cost-effective route for covering specific monthly outgoings. In addition, decreasing term policies used for protecting capital repayment mortgages are available at competitive premiums”.