Income replacement is the most important protection product available, Defaqto has said in light of today's Office for National Statistics unemployment data.
The Labour Market Statistics, February 2013, showed a small drop in Jobseeker's Allowance claimant count this year; claimants totalled 1.54m in January, down 12,500 since December 2012 and down 64,000 compared to the year earlier.
But the claimant count rate has remained unchanged since last year at 4.7%, albeit benefiting marginally by a 0.2 percentage point drop since the previous year.
Ben Heffer, insight analyst for protection at independent financial research company Defaqto, said: "Short-term income protection (STIP) does have a place and the change of name does distance it from Payment Protection Insurance (PPI) and all those problems.
"There is still a lot of confusion among consumers as to what is being purchased with STIP because we have long-term income protection too, which is a far superior product."
He said most quality financial advisers would always try to recommend long-term income protection as a first port of call but that there was a "clear place" for STIP.
The ONS report highlighted that claimant count may have been affected by changes to the overall benefits system including; changes in the eligibility rules for Lone Parent Income Support (LPIS); re-assessment, by the Department for Work and Pensions, of claimants of Incapacity Benefit (IB); and the introduction of the Work Programme in June 2011.
The ONS figures showed 2.5m unemployed this year having fallen 14,000 since July to September 2012 and down 156,000 since the previous year.
Employment rate for those aged from 16 to 64 was 71.5% and up 1.1 percentage points compared to last year.
There were 29.73m people in employment aged 16 and over in January, up 154,000 on July to September 2012, and up 584,000 compared to 2011.
Matthew Ogston, co-founder of job board JobPage.com, said: "Unemployment continues to fall, apparently defying economic logic. The economy is flat but somehow unemployment keeps coming down.
"The jobs landscape has changed considerably. Many companies, for example, are happy for their employees to work from home, saving on costs, too, which could have contributed to the increase."
