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9 in 10 customers cannot define “protection”

The industry must rethink the language around protection to give better support to intermediaries and boost public awareness, according to Legal and General.

Research from the firm shows  just nine per cent of consumers associate the term “protection” with life or critical illness cover.

A total 40 per cent of those surveyed thought “protection” referred to protection against physical harm or to protective clothing.

A further 19 per cent did not have a specific association for the term.

More than half the study’s respondents did not have a life insurance or critical illness policy.

Legal and General intermediary director Craig Brown says simplifying the terminology might encourage more people to pay for cover.

He add:s “As a sector, it is our responsibility to provide intermediaries with all the tools, products and information they need to empower them to help customers.

“Critical illness cover is viewed by many as a complicated product and in order to give consumers the clarity and comparability they need to choose the option best for them, we need to simplify language and support our intermediaries.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. “industry jargon confuses consumers”. This is news?

  2. My wife wrote an article about this 15 years ago.

    http://www.theactuary.com/archive/old-articles/part-5/why-so-complicated-3F/

    Things don’t change, some examples below. Her particular favourite was a “critical illness” policy that doesn’t pay out if the illness kills you.

    Waiver of premium benefit will remain in force if you reside in, or travel to, the European Union and/or travel or live temporarily in any other part of the world for a period not exceeding three months in any 12 months.

    We won’t pay a critical illness claim. Unless you survive for at least 14 days after diagnosis of a critical illness is made.

    The deductions include expenses, charges, any surrender penalties, and other adjustments.

    Exclusion for Mortgage Protection Insurance Unemployment” If you come to the intended end of a fixed-term contract, or a period of temporary/casual work or if unemployment is a regular feature of your work.

    You can have even more than one of the same benefit. For example, you can have a death or earlier critical illness benefit on an income basis for family protection and the same benefit on a decreasing lump-sum basis for loan protection.

  3. It seems extraordinary that such a high proportion of consumers don’t understand such simple concepts as the dangers of failing to insure against the disastrous consequences of dying or becoming seriously ill and leaving your family with a drastically reduced income (possibly none) with which to repay a mortgage and/or support the family.

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