By Daniel Hunter

The UK's self-employed workers are highly vulnerable to financial difficulties when ill health strikes, but they are drastically under-insured, according to British Friendly.

The survey, conducted among more than 500 self-employed workers, revealed that people just done trust insurers to pay out. Only 2% of those surveyed believe that Income Protection claims are paid more than 90% of the time by UK top insurers and nearly one in five believe claims are paid less than 20% of the time.

At the same time, 45% believe the main reason Income Protection claims are declined is because insurers deliberately try not to pay claims. The perceived expensiveness is also a concern, with 30% listing it as the main reason they don’t own a policy.

When asked ‘Have you, or anyone else you know ever been unable to work due to illness or injury for three months or more?’ (35%) said yes. The survey also revealed that 58% would have to stop trading immediately if they were unable to work for at least the next 12 months due to health reasons.

However, there is positive news. The research also shows that, when asked ‘Which one, if any, of the following features is/ would be the most important to you when looking to purchase these types of [Income Protection] insurance?’ 31% said knowing there is a good chance of a claim paying out. This was the most important reason for choosing an Income Protection product beating price into second place and means that many more consumers could be prepared to purchase Income Protection if only advisers and insurers can improve the way they communicate the message that these policies really do pay out.

Mark Myers British Friendly CEO, said: “We need to recognise that because certainty of claims is most important to self-employed clients, providers and advisers need to prioritise how we can effectively communicate to them that insurers pay a very high percentage of Income Protection claims.

“Insurers pay over 90% of claims on average, yet the public are not aware of this fact. It highlights the need to continue promoting the message that consumers are vulnerable and that those people with insurance policies are better protected and do have their claims paid. The consumer really does value that information.”