The majority of consumers, approximately 70%, report a notable absence of advertising for critical illness cover (CIC), including across television, social media, and news outlets, according to CIExpert’s forthcoming Critical Thinking Report.
This inaugural study underscores a concerning gap in consumer knowledge and recognition of CIC, with less than half (45%) grasping the fundamental concept of receiving a lump-sum payment upon diagnosis of a critical illness.
Misconceptions are prevalent, as evidenced by 17% of consumers mistakenly believing that CIC payouts are designated for mortgage settlements—a figure that escalates among younger demographics, with 27% of Millennials and 26% of Generation Z holding this belief. Additionally, a significant portion (49%) of consumers remain uncertain about the use of CIC payouts.
Scheduled for release at an industry event on 8th February, the Critical Thinking Report, supported by Guardian and HSBC Life, draws on the perspectives of 5,000 consumers, segmented by generation, and incorporates insights from over 300 advisers.
This comprehensive analysis addresses widespread misunderstandings about CIC, evaluates the advice process, and explores consumer opinions on various policy aspects, including joint versus single life cover and provisions for children.
Despite the prevalent confusion and misconceptions surrounding CIC, the report identifies potential for growth within the sector. Notably, two-thirds of consumers (66%) were unaware that CIC premiums remain constant from the point of purchase, a revelation that spurred 40% to contemplate acquiring a policy at an earlier stage in life.
Alan Lakey, director at CIExpert, expressed concern over the significant “protection gap” evidenced by the low uptake of CIC and the limited advertising exposure. He emphasised the Critical Thinking Report’s role in elucidating consumer attitudes towards CIC and the advisory process, aiming to enhance product design, marketing strategies, and consumer education. Lakey advocates for the transformation of critical illness insurance into a mainstream offering, rather than its current status as an adjunct to life insurance.
The full study launches on Thursday 8th February 2024 and can be found here – CIExpert Critical Thinking Report 2024.
