Britons are so confused about what income protection can do for them they are over-estimating state support and under-estimating the likelihood of them needing appropriate insurance.
According to research carried out among more than 2,000 adults by Censuswide, on behalf of Cirencester Friendly, 98.4 per cent of Britons do not know how long long-term income protection is supposed to last.
As a result, nearly 50 per cent said they would rely on the state for aid if they had to give up working due to accident or illness.
The figures also suggested 71 per cent could lose up to £300 of their weekly income if they did rely on the state supported statutory sick pay (SSP).
By contrast, survey respondents understood the value of buying protection for their pets - with 21 per cent saying pet insurance was a "must" compared with just 10 per cent who believed income protection was a "must".
Rebecca Young, head of marketing at Cirencester Friendly, said: "The lack of understanding around income protection insurance is shocking and perhaps goes some way to explaining why only 10 per cent of people say they would take out this form of cover.
"However, it appears that Britons are also ill-informed with regards to the level of support provided by the State if they fall ill.
"The government aid is intended as a safety net only – the State’s average long-term support is just over £70 a week; less than one fifth of the average take-home pay in the UK which stands at over £400 a week."
She warned those who have suffered the "misfortune" of an extended leave of absence from work could face serious financial hardship if they have not put adequate protection in place.
Ms Young added: "While people are more concerned with insuring their pets and their mobile phones, these findings should serve as a wake-up call; if you are unable to work then paying for either of these might be a luxury you cannot afford."
In April, Paul Brencher, managing director of individual protection at Aviva said there were perceived barriers to people taking out protection, such as the "pervasive myth" that insurers do not pay out.
He commented: "As an industry, we must ensure the pervasive myth that insurers don’t pay out isn’t a barrier to families taking steps to protect themselves against an unexpected illness or a death.
"However, claims rates could be even higher if all consumers were aware of the need to take extra care when making an application. Incorrect information, whether deliberate or accidental, and not checking the product details are some of the main reasons why a small proportion of protection claims cannot be paid.
