Could you get by without Protection?

Recent research by YouGov found that only 15% of people asked would get by without any financial difficulty should their financial circumstances change for the worse due to long term illness or incapacity.

The research was carried out as an initiative for the Financial Planning Week taking place this week (8-14th September) and highlights the importance of financial planning. The findings support claims made in Defaqto's Critical Illness report ‘Critical time for critical decisions' published earlier this year. The current mortgage decline and the tendency for IFAs to focus on Wealth management propositions over protection products were highlighted in the report as contributing reasons for the lack of critical illness cover within the UK.

Of the remaining percentage 30% said they would constantly struggle should their circumstances change for the worse due to long term illness whilst 48% felt they would struggle from time to time.

The Financial Planning Week is an initiative by the Institute of Financial Planning to encourage and alert people to the importance of financial planning in their lives. The survey also revealed that only a quarter of people thought about future financial priorities and goals and made appropriate plans to achieve them.

Steve Gazzard, Operations Director at The Institute of Financial Planning, says: "While we were pleased to see from the research that a lot of people do hold some form of protection product, it does appear that over three quarters of dependents would continue to struggle in the case of long term illness or incapacity.

"Financial Planning Week offers people unbiased information and a clear process to follow to get their financial future into shape, and protection against contingencies is a key part of any robust financial plan."

Ben Heffer, Principle consultant - Life & Protection at Defaqto, says: "T he YouGov research underlines what many in the industry already know, that protection has to be sold. Providers must be prepared to devote more marketing effort to protection, particularly income protection, and advisers must seek out potential clients to convince them of their need for protection products.

"The credit crunch presents a real opportunity for mortgage brokers, who may be feeling the pinch, to revisit their clients and review their financial plan with an emphasis on protection, which is as important as ever in these difficult times."