Critical illness insurance suffers from an “identity crisis” and consumers still struggle to understand the policy, CIExpert propositions and distribution director Paul Roberts has warned.
Speaking at the Protection Review’s ProtectX8 conference today (20 March), Roberts said the protection sector should stop making assumptions on behalf of consumers and trust them on the products they want for themselves and their families.
He highlighted a recent CIExpert study that showed consumers lack trust in the advice process, 17% did not trust advice at all and 15% did not think advisers added any value.
The study also found that one in four adviser clients were completely unaware of critical illness.
“The insights contained within the critical thinking report has demonstrated very clear proof that critical illness cover suffers from an identity crisis, misunderstood, undersold and underbought,” Roberts said.
Touching on the conference theme, The Humanity of Protection: Trust, he said the protection sector should put trust at the heart of the conversation with consumers.
He said: “We need to talk about trust with our consumers, our clients, our policyholders, the everyday person who wants to protect themselves, their families, and their businesses.
“Trust them to tell us about the products they want for the future, the added value services they’d like to access, how they’d like to be kept informed of the benefits they have and how they’d like to buy them in the future.
“It’s not for us in the industry to make those decisions for them. It’s the trust we have in our consumers that will help us all inspire the innovation in protection products they need.
“And without that trust in the consumers of today, we will all fail to give them trust in the protection plans of tomorrow.”
He talked at length about the importance of trust and how it is the underlying principle of every insurance policy.
He cited the Latin phrase ‘Uberrima fides’, which means “utmost good faith”, as a legal doctrine that governs insurance contracts.
“Today all contracts are issued on the basis of good faith but with a life insurance in particular the stronger in utmost good faith applies.
“So in other words, the insurer trusts the person or persons taking out the life, critical illness or income protection cover to tell them the truth about themselves, the reason they want the cover and for how long they want that cover for, so the correct insurance risk can be placed upon them and they must do that Uberrima fides.”
Roberts, a passionate advocate for critical illness cover, charted the history of the product from its infancy in the 1980s to present.
He said in the early days advisers were expected, without any medical knowledge or experience, to research and understand the differences between products.
But noted that this is no longer the case with the advent of independent research platforms that are now doing the heavy lifting for advisers which they use to make recommendations to their clients.
“Today the role of the independent research platform has never been so important and with advisers having more tech available to support them than ever before, the trust in these platforms is equally important,” he said.
