Among those who already hold a policy, this rises to one in three – 34% – and increases to 37% among the under-35s.
The survey, carried out by LifeSearch and HomeOwners Alliance, found that only a small minority of homeowners understood who income protection covered and for what reasons.
LifeSearch said the gap in knowledge showed that the insurance industry needed to improve its communication to customers.
Knowledge gap revealed
Some 16% believed the self-employed could not access income protection, rising sharply among younger groups to 31% of under-35s and 28% for those that already held cover. A further 38% did not know if this was true.
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The findings also point to a gap in how households think about risk. Nearly one in five homeowners thought only the main earner needed income protection, with uncertainty particularly high among younger households (30% of under-35s) and those with children (26%).
One in four people who currently have an income protection policy also agreed that it was something that only the main earner of the home needed.
Meanwhile, 36% of homeowners believed income protection only paid out for permanent or very serious conditions. This rose to 49% of under-35s and 45% of existing policyholders. A further 36% of homeowners did not know which conditions were covered.
More than 20% of homeowners thought they could only claim once on an income protection policy – rising to 26% of those that currently have a policy and 36% of under-35s. Most policies allow multiple claims.
Debbie Kennedy, chief executive of protection specialist LifeSearch, said: “Income protection can provide a valuable safety net to so many people, yet this research shows there’s still a real gap between how people think it works and what it actually provides.
“At LifeSearch, we see this play out in real conversations every day. These misconceptions reflect an industry that has historically done a better job of selling protection than explaining it. If we want customers to value their cover, renew it, and tell others about it, then clearer communication, better ongoing engagement and stronger product understanding need to become the norm – not the exception.”
Paula Higgins, chief executive of Homeowners Alliance, added: “At a time when more people are self-employed and households depend on two incomes, these misconceptions matter. Income protection can provide vital support if illness or injury stops you working, yet too many people either misunderstand it or overlook it entirely. There’s a real need to improve awareness so people understand what cover is available before it’s too late.”
In February, Allianz UK launched a short-term income protection policy to cover people facing unexpected life events. The policy needs no medical underwriting and provides immediate cover.
