During 2024 CIExpert commissioned Opinium to speak to 5,000 consumers – a mix of genders and ages – regarding critical illness (CI) insurance.
The aim was to better understand the knowledge and perceptions. With CI sales only 50% of the 2003 heights it was clear that the message was not getting through.
This year CIExpert repeated the investigation (CT26) and also added income protection (IP) to the questions which now involved interviewing 10,000 consumers.
The prime message to be drawn from the latest piece of research is that a high level of ignorance prevails amongst consumers. A very high percentage had no opinion or answer to give – indicative of obliviousness – additionally, those with opinions or viewpoints frequently got it wrong.
LOST INCOME
As with the previous research, most stated that they wouldn’t use the proceeds to repay their mortgage but would rather cover lost income or spend on private healthcare.
Some 65% of those with an opinion believe that IP plans pay a lump sum and 66% believe they pay out if made redundant.
Only 15% of respondents believed it covered depression. When questioned about their employers sick pay only 22% knew exactly what they would receive with 40% either not knowing or having never thought about it. When asked how relevant IP was to their circumstances 57% said it was not!
STATE RELIANCE
Reliance on the state or the NHS remains high even though most will have no idea that Statutory Sick pay is £118.75 per week for up to 28 weeks with the self-employed receiving less.
It is readily apparent that CI and IP plans confuse most consumers with their benefits frequently juxtaposed. The need for advice is evident and one has to wonder at the number of mis-purchases made on the various aggregator sites.
When asked what might persuade them to take out a CI plan real life examples of successful claims showed as the main driver. Clearly a message for insurer marketing departments to focus on these when advertising.
COST ISSUES
Cost is stated as the prime reason for not effecting a CI plan with a high percentage also saying because they don’t have a mortgage or children. Some 4% said because they have life insurance, further developing the theme of ignorance.
One surprising response showed that no clear evidence that consumers favoured comprehensive CI plans over the basic core versions.
“Pet insurance sales are now over 400% higher than CI sales.”
Again, this is surely down to a lack of understanding and possibly a perception of added outlay.
With pet insurance sales now over 400% higher than CI sales there are great opportunities for advisers to assist their clients by removing the mystique and highlighting the clear and obvious benefits of both CI and IP.
TRIGGER POINT
When questioned about the benefits of CI plans the main trigger for purchase was fear regarding the ability and timeliness of the NHS and general ill-health concerns. This suggests that for these respondents an IP plan might prove more appropriate.
The most obvious fact to emerge from the responses is that advisers need to explain what is available in simple terms, maybe using clearer terminology such as ‘personal sick pay’ instead of income protection. It is apparent that when presented with clear information, regarding benefits and value, perceptions change.
Let’s not forget the wise words of Sir Winston Churchill.
“If I had my way, I would write the word ‘insure’ upon the door of every cottage and upon the blotting book of every public man; because I am convinced, for sacrifices so small, families and estates can be protected against catastrophes which would otherwise smash them up forever.”
