Over a third (35%) of consumers perceive affordability as a barrier to protection, according to the Association of Mortgage Intermediaries (AMI).
As part of its third annual Viewpoint Report entitled ‘The Great Protection Shift’, AMI asked 3,000 adults and over 250 advisers their views on issues relating to the protection market.
With affordability a main concern amongst respondents, almost a third (30%) of younger people (18-34 years) thought they are “too young” for protection.
Additionally, research found that for a third year in a row, half of consumers (50%) believe commission is a broker’s main motivation when they suggest protection, while almost a fifth (18%) of consumers are not confident talking to their broker about their health.
Robert Sinclair, chief executive at Association of Mortgage Intermediaries, said: “Against the current economic challenges, it’s never been more important to help consumers understand the vital role of protection and the benefits of advice.
“Now in its third year, this year’s Viewpoint brings new insight, delves deeper into views uncovered in previous years and highlights recurring trends.
“While we hope this report provokes active debate at both an industry and firm level, we also want it to bring the industry together, to take stock of what’s working well and what isn’t and result in action.
“This is why we have decided to introduce a five-point plan as a call to action to kickstart the ‘Great Protection Shift’.
“AMI plan to work with its Protection Specialists Group and in collaboration with the ABI, PDG, IPTF, our insurer partners, Legal & General and Royal London and the wider industry, to champion change. Let’s work together as one industry, as together we can shift the dial.”
AMI’s new five-point plan, which aims to tackle consumer barriers and misconceptions within the protection industry, launched today and can be viewed within AMI’s annual report.
Carrie Johnson, customer life stage director (protection) at Royal London, said: “As life gets more expensive, people are having to make difficult choices about their monthly outgoings and protection insurance may not seem to be an essential cost.
“Providers and advisers have a responsibility to continue to help people understand the benefits of having cover in place and the financial security it provides if they were to face a life shock.
“As an industry there is more to do to address the recurring issues around lack of trust in claims statistics, poor customer understanding of income protection, and the fact that the vast majority of consumers think life insurance is important but only the minority have it.”
Julie Godley, director of intermediary at Legal & General, added: “As the cost-of-living crisis continues to bite and people focus on getting by day to day, it’s easy for them to underestimate the value of their long-term protection.
“Protection can be hard to justify, but it can be a financial lifeline to cover essential living costs like mortgage payments or even food.
“Life cover is no substitute for the loss of a life, but it does protect families from an incredibly difficult additional financial burden.
“As an industry we must continue to help people understand the essential benefits of having cover and the financial security it provides and address the misconceptions surrounding these vital products.”
