Common myths around financial protection

Having spent several months collating data from vast numbers of claims, it’s about that time of year when protection providers start to release their claims statistics.

This is significant as the providers like to shout about the support they have given to thousands of clients through pay outs on Life Insurance, Critical Illness Cover and Income Protection policies in the previous year.

This made me think about the common misconceptions people often have about “insurance”, especially when it comes to protecting their financial well-being by utilising one of the polices above.

Our advisers at Fairstone do a great job of navigating clients through such conversations to ensure that, should they need it, there is substantial financial support available through some of the darkest days people can go through.

During these conversations we often get similar concerns raised so I thought this would be a good opportunity to correct some common myths and misconceptions.

Myth number one: it won’t pay out

Clients have often had an insurance policy of some kind in the past, whether that’s mobile phone cover, car insurance or holiday insurance and it’s common to have had a negative experience claiming on such polices.

However, this is where the financial protection side differs. Clients are paid out in the vast majority of cases due to the outstanding advice they receive, alongside a policy which is tailored to their needs.

Examples below are taken from our top 3 providers on claims paid for Life and Critical Illness cover in 2025:

How Fairstone clients have fared

At Fairstone we ran an exercise in 2023 across our top six protection providers to see how well we supported our clients through quality advice.

The figures were encouraging.

In 2023 alone, we helped over 200 families through their toughest times with policies we had written based on our advice.

This meant that through high quality advice we provided on financial protection, Fairstone clients and their families benefited from over £18m of payouts.

When we looked back over five years, we had supported our clients with over £90m of protection claims.

Myth number two: it won’t happen to me

It’s clear that there are people who do have to face life’s biggest challenges, proven by the fact that just three providers paid out over £2.4bn of life insurance and critical illness claims in 2025.

The statistics behind these figures also show that people of any age can be affected by a life-changing illness or death.

The youngest person to make a critical illness claim was only 21 with the average age being 50. The same provider even paid out £6.8m in critical illness claims for children.

Nobody knows what the future holds and financial protection can take some of the worry away should the worst happen.

Myth number three: it costs too much

There is often an assumption that protecting your family comes at a high cost.

This assumption is normally based on people not understanding what is covered or how the policy works, with people often not realising what it can take to protect their lifestyles.

The average age of a first-time buyer is 36. To cover a 36-year-old male for £250,000, for 25 years to pay out in the event of his death could cost as little as £7.75 per month – roughly the cost of a large coffee from one of our favourite coffee shops.

To cover a female for the same amount and term, for life insurance and critical illness cover, could cost as little as £47.90 per month.

Statistics have shown us that more people insure their pets than they do themselves, but if that person isn’t protected well and the worst was to happen, how do they ensure their pets are covered?

Getting advice on protection

For more information about financial protection and how it can support you and your family get in touch with an adviser today. It could be the best decision you will ever make.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR OTHER LOAN SECURED AGAINST IT.

Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. A recommendation will be made only following a full assessment of your personal circumstances. Always seek professional advice before making financial decisions.