Around 70 per cent of consumers do not recall seeing any recent media advertisements for critical illness insurance (CIC), according to CIExpert.
The study shows that customers have a serious lack of knowledge and comprehension about CIC. It found that 45 per cent of people understand the basic idea that, if they are diagnosed with a severe illness, they would get a predetermined lump-sum payout.
Moreover, 17 per cent of consumers falsely think that a CIC payout has to be used to pay off a mortgage; among Millennials and Gen Z, this assumption rises to 27 per cent and 26 per cent, respectively, with 49 per cent of respondents stating they “didn’t know.”
The research points out a few promising opportunities and future directions for the industry. For example, 66 per cent of participants are not aware that CIC’s price is fixed from the moment of purchase. 40 per cent say they are more likely to think about a policy sooner rather than later in life once they are aware.
CIExpert’s Critical Thinking Report, sponsored by Guardian and HSBC Life, premieres at an industry event on February 8th. Based on input from 5,000 consumers and 300 advisers the report examines common misconceptions that consumers hold on CIC, insights on advice and the barriers that exist, views on joint vs single life cover, children’s policies, and what would drive them to consider CIC in the future.
CIExpert director Alan Lakey says: “Are we surprised there is a protection gap where so few consumers currently have critical illness cover and when so few have seen any advertising for it? A staggering 74 per cent of women, and 66 per cent of men, cannot recall seeing any advertising for critical illness cover including on TV, in social media or in the news.
“Our new Critical Thinking Report assesses consumers’ awareness and attitude towards critical illness cover to better understand both the barriers and drivers to taking a policy. In parallel we have also sought to better understand the advice process and what advisers consider when they recommend plans to their clients.
“With greater comprehension, the industry can refine its approach to product design and marketing and also assist in the education process. This is essential in developing critical illness insurance into a mainstream product as opposed to its current position as an appendage to a life insurance policy.”
