The expense of critical illness cover is the main barrier for consumers looking to take out protection, research from CIExpert has revealed.
The research, Critical Thinking Report 2024, examined why consumers have not taken out CIC, with price being mentioned by 41 per cent of respondents.
This was ahead of not having a mortgage ( 26 per cent), not trusting it will pay out, not understanding its benefits, and not having children - all of which were cited by 14 per cent of respondents.
The lack of understanding about CIC was particularly prevalent among younger respondents, with 22 per cent of Gen Z and 20 per cent of millennials identifying it as a barrier.
This was out of line with the experience of advisers as, when asked what consumer’s main objections are to purchasing cover after having CIC explained to them, 85 per cent said the expense.
Quantity of CIC advice
The report, which surveyed 5,000 UK consumers and was conducted in November and December 2023, also shed light on how many respondents have taken professional advice, with 85 per cent of consumers deciding not to take advice.
However, CIExpert added that an “opportunity exists” as 47 per cent said they had not taken advice but would consider it in the future.
The report also looked into reasons why consumers would not seek advice in the future, with the largest factor being they did not want to be pressured into buying something (28 per cent).
This was followed by not being able to afford an adviser (27 per cent), preferring to search online (17 per cent), or just not trusting advisers (17 per cent).
Women in Protection Network chair, Emma Thompson, argued this was a gendered issue, stating: “More women than men have concerns about being pressured or believe they can’t afford advice.
“Conversely, women have more trust in advisers and recognise the value they add, illustrating the opportunity for advisers to effectively engage with female customers.”
To address this, consumers were asked what would make them more likely to use an adviser for advice on CIC products in the future, with 30 per cent identifying advice being free as a motivator.
Protection Distributors Group chair, Neil McCarthy, stated that this represents a “challenge” to the industry in explaining to consumers the value of advice and to “reinforce” that most advisers do not charge a fee for the advice they provide on protection products.
tom.dunstan@ft.com
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