The Exeter, has released new findings showing that over a third of UK consumers view insurance products that cover the cost of accessing private hospitals and medical treatment as an essential purchase.
However, despite this awareness of products such as private health insurance, only 8% have purchased a product in the past two years. This equates to 16 million working-age people in the UK who consider it important compared to 3.6 million who have recently purchased a policy. The high importance placed by consumers on private health insurance is likely a reflection of the continued pressures facing the NHS and a desire in accessing quicker care.
The research also revealed that products which pay a lump sum in the event of death were highly valued, with 33% of respondents, the equivalent of 14.7 million people, choosing it as the second most important non-compulsory product.
Similarly, insurance that would pay a monthly proportion of an income if someone were unable to work due to illness or injury was cited as important by 32% of respondents, the equivalent of 14.2 million people. 30% of respondents, or 13.4 million working age adults, stated insurance which paid a lump sum in the event of a serious illness (such as cancer or a heart attack) as important.
Consumer purchasing patterns unreflective of feelings
Although the research indicates that consumers value health and life insurance products, actual purchasing behaviour tells a different story.
According to the research, home insurance was the most purchased non-compulsory insurance product overall, with 34% of consumers saying they purchased building, or contents cover in the last two years. This was followed by travel insurance which was purchased by 33% of respondents.
Meanwhile, although 32% of respondents said income protection was important, as few as 7% purchased the product, with 12% of consumers purchasing critical illness cover. Private health insurance uptake was similarly low, with only 8% paying for it themselves and 8% receiving it through an employer.
The research shows that UK consumers are more willing to insure material possessions than their health and income, despite the ready availability of relevant products.
Steve Bryan, Director of Distribution and Marketing, The Exeter comments: “The gap between consumers recognising the importance of private health insurance, income protection and life insurance products, compared to the actual number of purchases is worrying. It’s natural to want to protect your assets, such as your home and belongings, but it’s equally as important to look after our health and income – things that we can often take for granted.
“I would urge anyone who has considered buying a health or life insurance product in the past, but hasn’t, to look at the options available to them. A conversation with a financial adviser is also hugely important to see what options best meet their needs. There is also more to be done to increase general consumer awareness of the products that are available. This is something that will take time to achieve but advisers and insurers will continue to work together to ensure products are more accessible and become an important part of everyday financial planning conversations.”
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