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three ostriches with head in sand

Head in the sand

08 September 2016

Nine in ten employees underestimate the chances of becoming unable to work through illness.

UK employees severely underestimate how common it is to be unable to work due to serious illness or injury, according to new research from insurer Canada Life.

Nine in ten workers believe the number of people off work for more than four weeks due to illness or injury each year is between 1,000 and 100,000. In reality, the Association of British Insurers estimates this figure is closer to one million.1

Many employees freely admit that they would struggle to make ends meet if they were unable to work for long periods due to illness. Mental health issues, cancer and arthritis are typical examples of illnesses that can prevent people from working, but problems like back and neck injuries can also force people out of work for unexpectedly long periods.

Duck and cover

Various forms of protection are available to cover the financial impact of illness. Income protection insurance is one such option: it replaces part of your income if you become too ill to work. It pays out until you can start working again; or until you retire, or the policy term expires.

However, more than three in five employees do not have any form of income protection, equivalent to 19.3 million people2. The ‘head in the sand’ approach is one of the most common reasons for not arranging cover, with more than a quarter of those without a policy saying they would rather take the risk and 18%2 believing they will never need income protection.

Despite hoping they will never need it, 31%2 of employees without income protection would be worried about how to survive financially in the event of an injury or illness that prevents them from working, rising to 45%2 of workers with two children.

“Everyone should ask themselves how they would cope if they couldn’t pay the bills,” says Tony Müdd, Divisional Director at St. James’s Place. “Unfortunately, this study demonstrates that too many people think that serious illness or injury won’t happen to them. The fact that a high percentage of people seem willing to take the risk is very worrying and might explain why cover isn’t more widespread.”

Unless a form of protection is provided through your employer’s benefits package, then you should look to arrange your own cover. It’s important to look at which illnesses and injuries are included when selecting a policy, so that you know exactly what situations are likely to be covered. An adviser will be able to recommend policies to fit with your age, occupation and health.


1 Welfare Reform for the 21st Century, Association of British Insurers, September 2014

2  Canada Life, August 2016

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