A growing number of UK households are dangerously exposed to income shocks despite advisers stepping up protection conversations according to new data from The Exeter and the Association of Mortgage Intermediaries (AMI).
Research from health and life insurer The Exeter shows that one in four (24%) consumers have less than £500 in savings to cover essential expenses, while 14% have no savings at all. Yet nearly one in five consumers drop out of the protection buying journey, rising to 25% among under-35s.
The findings highlight what the insurer describes as a widening “perception gap” between adviser activity and consumer understanding.
According to the sixth AMI Viewpoint, sponsored by The Exeter, Legal & General and Royal London, 82% of advisers say they discuss protection directly with clients. However, only 39% of mortgage holders recall having such a conversation.
LIMITED UNDERSTANDING
Consumer understanding also appears limited. Just 35% of respondents were able to correctly identify income protection products when provided with a description, suggesting a failure to translate advice into meaningful comprehension.
The Exeter is urging the industry to simplify protection conversations, address misconceptions earlier and reinforce the value of cover beyond worst-case scenarios.
Steve Bryan, Director of Distribution and Marketing at The Exeter, said: “Advisers are clearly committed to protecting their clients, and the latest AMI Viewpoint shows just how much good work is already happening.
“What the findings highlight is an opportunity for all of us to continue improving how we support consumers in understanding their options.
“Our aim is to make the protection journey as seamless as possible.”
“Our aim is to make the protection journey as seamless as possible. We’re encouraging advisers to make full use of the expertise, tools and resources available across the industry, all of which are designed to help simplify conversations, strengthen client understanding and make their day-to-day work easier.”
