Life buying habits revealed

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26 July 2010

Maintaining lifestyle was the most common reason why people buy income protection insurance, a new survey has found.

The survey by intermediaries Lifebroker says 22% of the 1000 people surveyed who owned life insurance would buy income protection “to protect their income and security”.

Lifebroker MD Chris Eade says buyers of life insurance are motivated by the fear of death, but income insurance protection buyers are more concerned about maintaining their lifestyle.

“People who buy income insurance often tend to be self-employed workers who are looking for a practical solution to real day-to-day financial risk,” Mr Eade said.

“Self-employed people are more acutely aware of the risks of not working, while employed people are more likely to have a false sense of security due to holiday and sick leave entitlements.”

The buying habits of people seeking income protection means they shop around more and review polices more often, the survey found.

This compares to people buying life insurance who are more likely to buy direct from an insurer in response to online, phone or mail advertising.

“They are also less likely to compare life insurance quotes from other insurers and are less likely to review their level of cover annually compared to people who buy income insurance,” Mr Eade said.

“People who buy only life insurance would do well to take more time in their decision-making process.”