Income Protection Cover – Should I Cancel My Plan?
Q. I’ve had my income protection policy for a number
of years now and, as I’m approaching my 50th birthday I’m wondering if it’s worth keeping the policy going.
In particular (and maybe to help me decide), I’m curious to know how many people actually claim on this type of cover each year?
Do the insurance companies actually publish their claims statistics?
A. It’s always good to take stock and reassess any financial products that you hold.
The first question to ask you is: if your income ceased due to being unable to work due to sickness, injury or accident, would you be able to cope financially?
And for how long?
Obviously it’s impossible to know in advance how long you might be off work for, however it’s useful to look at the figures from the main providers as a guide (yes, they do publish their claims data).
For example, during 2016 Aviva paid 3,549 income protection claims, with an average duration of 3 years 16 weeks.
The reasons for the claims were:
- 28%, mental health conditions
- 20%, musculoskeletal conditions
- 12%, cancer
Interestingly (and related to your question), 71% of claimants were aged over 40.
Our professional opinion is that it may be prudent to retain your cover as you just don’t know if you’ll ever need it.