If an individual is unable to work due to a critical illness or injury, they will find their lifestyle rapidly becomes unsustainable.
Most families have very little to fall back on, with average savings in Britain at just £1,205. More than a third have not put anything away at all, according to Legal & General's own data.
Moreover, everyday tragedies that see families lose their main breadwinner are shockingly common.
When Legal & General surveyed more than 5,000 people for its Deadline to the Breadline report, close to half (45 per cent) said they knew someone who had suffered a serious illness or injury.
Providers need to change the way we talk about these covers – but also speak with one voice.Yet, despite this, recent Mintel data shows that 58 per cent of mortgages have no life cover at all.
The message, plainly, still is not getting through to the public.
Is it time then to rethink how we’re talking about this insurance, rather than just trying to shout louder?
There are, of course, a number of complications.
For a start, there has been expanding coverage under many critical illness insurance products, increasing the range of illnesses covered. That’s good news for customers, but also potentially increases the complexity of policies.
Even when it comes to the big three – cancer, heart attacks and strokes – that account for up to three-quarters of most insurers’ claims, it is not always clear to customers exactly what is and is not covered.
We need to remember that consumers do not usually have medical degrees.
Secondly, we need to keep in mind that some key concepts, such as the distinction between critical illness cover and income protection, still confuse many consumers. That’s why advice is so important in this space.
But it goes beyond even this.
Our research shows that even the basic terms we use do not necessarily have the same connotations for customers that we assume they do.
A recent survey we conducted found that, when asked with what they associated the term “protection”, fewer than one in 10 consumers (just 9 per cent) thought about insurance; 40 per cent would assume you were talking about physical rather than financial protection, such as protective clothing.
About one in five do not associate the term with anything at all.
That’s not a great testament to the efforts of an industry that has been operating using this language for decades.
It might be that making real headway tackling the ‘protection gap’ starts by stopping talking about it – at least in those terms.
There is no certainty here, and we do not have all the answers, but it’s time to open the debate about the language we use and how we can simplify and clarify this for customers.
In truth, a couple of providers have tried rebranding their policies and renaming critical illness as “body cover”, for instance.
It is great to see businesses trying something new. But we also have to be careful we do not just end up exacerbating the problem.
It is not just a question of whether these new names are any clearer than the traditional terms; the point is, unless the industry moves together, we could end up with a range of different names for the same covers. That will lead to just more confusion.
Providers need to change the way we talk about these covers – but also speak with one voice.
To do that will require us to come together and, crucially, work closely with and support the great work advisers already do in raising awareness about this type of cover.
If we want to get a better idea of what will really cut through with customers, we first need to listen to the adviser voice.
And, in the meantime, helping them generate conversations about the risks clients face, and the cover they need remains the best way we can try to change the story around protection cover.
Craig Brown is a director at Legal & General Intermediary
