Protection Tomorrow May 2021 | Page 12

12 PROTECTION TOMORROW
Policy priorities
The client ’ s view ...
How important is it to hold products ? Percentage very or fairly important .
Contents insurance
Buildings insurance
Mortgage payment protection
Life insurance
Accident , sickness and unemployment protection
Income protection
Critical illness insurance
80 % 80 % 65 % 65 % 62 % 59 % 59 %
Which one of the following products do you think is being described here ?
An insurance policy that pays out when you are diagnosed with a disease or condition covered in your terms and conditions
A short-term policy that replaces your income for a set amount of time ( e . g . up to 12 months ) if you can ’ t work due to health reasons or redundancy
An insurance policy that pays a regular income if you ’ re unable to work or have lost income because of health reasons
Income protection 5 % 44 % 31 %
Accident , sickness and unemployment protection
Critical illness insurance
18 % 36 % 42 %
62 % 7 % 14 %
Life insurance 5 % 2 % 3 % Other 1 % 2 % 1 %
Payment protection insurance
54 % Don ’ t know 8 % 9 % 9 %
Actual protection holding
Contents insurance
0 10 20 30 40 50 60 70 80
Which of the following financial products do you currently hold ?
61 %
Only 31 % correctly identified IP from its description , with 42 % thinking it was ASU . Similarly , when given a description of ASU , 44 % think it ’ s IP – a higher percentage than the 36 % who correctly identified it . Awareness and education campaigns may help to bridge this knowledge gap but the research found there were further obstacles preventing take-up .
How well do you feel you understand what each of the following products do ?
Buildings insurance
Life insurance
Critical illness insurance
Mortgage payment protection
Accident , sickness and unemployment protection
Income protection
Payment protection insurance
51 % 33 % 10 % 10 % 8 % 7 % 6 %
None of these 22 %
I have a very good understanding
I have some understanding
I have no understanding
NET : Very good / some understanding
Income protection
Accident , sickness and unemployment protection
Critical illness insurance
Life insurance
Payment protection insurance
Mortgage payment protection
20 % 22 % 22 % 37 % 21 % 24 %
55 % 58 % 58 % 53 % 52 % 54 %
25 % 19 % 20 % 9 % 27 % 22 %
75 % 81 % 80 % 91 % 73 % 78 %
0 10 20 30 40 50 60 70 80
While the majority say they understand what the different products do , this knowledge doesn ’ t stand up to further interrogation . When asked to identify a protection product from a description , 62 % of respondents recognise critical illness insurance but there ’ s much more confusion around income protection ( IP ) and accident , sickness and unemployment protection ( ASU ).
A key finding is consumer trust . When asked about the claims statistics published by insurers , 57 % say they don ’ t trust them very much ( 43 %) or at all ( 14 %). In fact , when probed further , consumers believe that insurers typically pay far fewer than the 98.3 % reported by the ABI . In fact , consumer estimates start at 51.9 % for IP and rise to 71.1 % for life insurance .