The FCA has published the results of its pure protection market study consumer research.
Key conclusions from the quantitative results of the study include:
- 42% of consumers held a pure protection policy (privately purchased policies and those held as employee benefits). Holders generally report higher levels of financial knowledge and confidence compared to non-holders;
- Most life insurance products were privately held, while critical illness cover and income protection are more evenly split between private and employer-provided policies;
- The main reasons for not having cover included affordability, perceived lack of need, and low knowledge or confidence in obtaining cover;
- The triggers for purchasing cover were similar across different policy types, including considerations of future responsibilities, buying a home, or receiving recommendations from financial advisers;
- Most recent purchasers had a clear plan or general idea of their needs, although some were influenced by recommendations;
- A significant proportion of recent purchasers shopped around for policies, finding the process generally easy. However, barriers included the perception that all policies are the same and difficulties in comparing policies and prices;
- Professional support was utilised by 77% of policyholders, although purchasers of over 50s insurance were less likely to do so;
- 1/3 of respondents having reviewed their protection needs in the last year, while a similar proportion had never considered it;
- Vulnerability is prevalent among recent purchasers, with higher incidences of financial resilience issues, poor health, and negative life events serving as triggers for policy purchase; and
- More than 70% of respondents perceived their policies to be good value for money, with most feeling positive about their purchase decisions.