New research, commissioned by Aegon UK and carried out by NMG Consulting in June this year, has looked at the reasons why people don’t buy protection products.
The findings, which came from a survey of 500 sole/joint household financial decision makers aged between 25 and 60, identified four key barriers stopping people from buying protection – price, complicated products, a complex application process and lack of confidence in providers to pay claims.
Only 35% of respondents currently held protection policies. A further 35% who don’t currently hold protection would consider taking it out, which indicates an acknowledgement of the need for protection. The remaining 30% of respondents don’t hold and wouldn’t consider a protection policy.
Of those who would consider protection policies, 66% highlighted expense as a barrier, 63% were concerned by whether or how much they would pay out and 41% said they were too complicated with too much small print.
The reasons given by those who would not consider protection policies were similar with 48% identifying expense, 41% not trusting them to pay out and 16% saying they were too complex.
And, despite some good experiences, these barriers to consideration generally outweighed the perceived benefits of protection.
John Wilkinson, Aegon UK protection director, said: “These barriers are preventing people from actively ‘wanting’ protection forcing the protection gap to continue to widen, but our story doesn’t end here.
“It’s easy to identify the protection need, but the conversion of a customer ‘need’ to a ‘want’ for protection has always been difficult. The role of an adviser in helping a client see the value of protection is pivotal. We believe our Simply Life product can help, and advisers like our solution.”
John Wilkinson continued: “It’s time to stop talking about the protection gap and start embracing the solutions out there. There are unprotected people out there with a clean bill of health and simple protection needs looking for a simple solution.”
