Advisers are misjudging the triggers likely to prompt a consumer to buy protection and are less confident in the protection market than they were a year ago, research has shown.
According to Royal London’s State of the Protection Nation report, buying a house and starting a family are recognised as the main life events that could urge a consumer to take out protection.
But beyond that, advisers and consumers have different perceptions on what the next biggest triggers for a protection purchase are.
Royal London polled 2,005 consumers and 202 advisers in March and found that advisers thought a friend or relative being ill or dying was the next life scenario most likely to prompt a purchase, but consumers said a salary increase was the biggest trigger moment after a house purchase or starting a family.
In fact, the findings showed more than one in 10 (12 per cent) had taken out income protection after a pay rise.
The research also showed that starting a business, a new job or becoming self-employed scored highly as reasons consumers had taken out income protection.
The report stated: "It might be sensible, then, to look out for customers whose salaries change, or who start new jobs or entrepreneurial ventures.
"They're more likely to connect income protection with the income their minds are focused on at that point in time. And these events could be more common for the younger generations than buying a house or having a child."
The report also found that both consumer and adviser confidence in the protection market had decreased since last year.
This year’s consumer confidence rating came in at 52.6 — down from 54.2 last year.
Adviser confidence fell less dramatically from 60.5 to 60.3, but was on a downwards trajectory from the 60.8 scored in 2017.
The findings showed the decline in consumer confidence was most likely due consumers being increasingly sceptical.
A third of consumers felt sceptical about buying any kind of protection product while more than a quarter (26 per cent) were anxious their policy would not pay out.
Only 15 per cent of consumers polled thought everyone in employment should consider income protection.
On top of this, when asked to rate how much they agreed with whether life insurance was essential for anyone with a mortgage or dependants, the average answer was 6.6 out of 10 (where 10 was to agree fully).
The research also showed that advisers have become steadily less optimistic about protection over the years, citing cost and difficulty in selling protection as key drivers.
Optimism about opportunities in the market has fallen — 26 per cent to 23 per cent in the past two years — while calls for greater innovation in the space have increased from 20 per cent to 27 per cent in the same time period.
Advisers said the rising cost of living was the biggest threat to protection, closely followed by consumer inertia and lack of income growth.
According to the report, about a third of advisers thought the ageing population was a good opportunity for the protection market. However, almost as many advisers (27 per cent) thought the ageing population posed a threat to the sector.