Seven in 10 (70 per cent) consumers cannot recall seeing any advertising for critical illness cover recently on TV, in social media, or in the news, a study from CIExpert has revealed.
The study discovered a “significant lack of understanding and awareness” of CIC among customers, with only 45 per cent understanding the “basic” premise that they would receive an agreed lump-sum payout when diagnosed with a critical illness.
Furthermore, 17 per cent of consumers wrongly believe that a CIC payout must be used to pay off a mortgage, a belief that is particularly potent among younger people, as 27 per cent of millennials and 26 per cent of Gen Z expressed this idea.
A further 49 per cent of customers did not know whether this was accurate or not.
CIExpert director, Alan Lakey, said: “Are we surprised there is a protection gap where so few consumers currently have critical illness cover and when so few have seen advertising for it?”
Lakey also pointed out that 74 per cent of women, and 66 per cent of men, cannot recall seeing any advertising for critical illness cover.
CIExpert’s recently published Critical Thinking Report, discovered many misconceptions and a lack of understanding about CIC among customers, however, it also revealed some positive opportunities for the sector.
For example, it found that two-thirds of consumers (66 per cent) were not aware that the price of CIC is fixed from the age they buy it.
However, once informed of the price, 40 per cent were more likely to consider a policy sooner rather than later in life.
Lakey added: “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.”
He additionally stated that the industry can refine its approach to product design and marketing through greater comprehension and can 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,” he said.
tom.dunstan@ft.com
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