Despite reporting high levels of engagement with protection insurance, research from Vitality indicates a significant misunderstanding among younger customers about how critical illness cover (CIC) actually works.
This is according to consumer research carried out by Opinium on behalf of Vitality with 2,000 homeowners with a mortgage which also found four in 10 homebuyers under 35 (38%) said they would turn to social media content for advice on finance and mortgages. This compared with just 22% of those aged 55+.
Nearly three in 10 18–34-year-olds (28%) purchased their home alone, and 70% said that they reviewed their protection during their most recent re-mortgage, 10% higher than the net average.
However, despite high engagement with protection, the research indicated confusion around serious and critical illness cover protection products among younger mortgage holders. For example, many under 35 policyholders said they would use a pay out as income replacement while they are unable to work, or to fund medical treatment, while only half (52%) would use a critical or serious illness pay out to reduce their mortgage.
One in five under‑35s said protection was either not discussed until after their property purchase or not discussed at all. And around six in 10 (60%) of those who did not have a protection conversation said they would have considered taking cover had it been raised earlier in their application.
Gap in support and advice
Andy Philo, director of strategic partnerships at Vitality, (pictured) said: “Younger buyers are entering the housing market with a strong awareness and desire to make informed financial decisions. What this research highlights is not a lack of engagement with life insurance products, but a gap in the type and timing of support and advice. Social media feels accessible and relatable, but it can also leave people without the clarity and accuracy that regulated advice provides.”
Philo added that for advisers and insurers, there is a real opportunity to connect earlier in the journey and help younger buyers understand how protection fits into their wider financial picture.
Opportunity to engage
“At Vitality, our focus on protecting and enhancing the life people have built, not just their mortgage, encourages ongoing engagement with their cover, meaning members get value throughout the lifetime of their policy, turning it into something meaningful and relevant to their everyday wellbeing and lives,” he continued.
“As an industry, we have a unique opportunity to come up with ways to engage with and resonate with younger audiences to ensure they feel confident, informed and engaged with their products.”
