According to a new report by insurer trade body
ABI - income protection and critical illness are the hardest for the public to
understand.
Payment protection insurance, critical illness
cover, and mortgage payment protection insurance ranked the lowest in terms of
general understanding.
52 % rated their understanding of payment
protection insurance at five out of ten or below.
36% rated their understanding of critical illness
insurance at five out of ten or below.
52% rated their understanding of private medical
insurance as good.
48% rated their understanding of life insurance
as good.
The ownership levels of all four types are low.
The 2500 consumers were asked how difficult they
find it on average to compare the benefits and features of each type of
insurance product.
Payment protection insurance and critical illness
cover once again finished towards the bottom, with 55% and 45 % indicating
considerable difficulty in judging these products’ merits versus competitors.
Private health and life insurance also suffered
in terms of product comparability, with around a third claiming difficulty
while shopping for policies.
The results are a sharp warning to insurers that
they are losing potential business as consumers find it hard to understand the
products.
Simplifying product terminology and adjusting to
the economic reality may prove to be necessary steps for insurers if they wish
to thrive and attract more clients in 2012 and beyond.
Critical illness came off the worst, and it is a
product designed by industry committee. Perhaps it is also a warning to trade
bodies, insurers and regulators, that products designed by consensus are no
replacement for simple easy to understand products developed by individual
insurers.
Income protection insurance news: 7 February 2012
