Added services are a key determining factor to people favouring one protection policy over another, according to research from Hymans Robertson.
And while more than a third of people (39%) were more likely to buy protection insurance as a result of their experiences during the pandemic, price remained a primary driver for whether the purchase completing, with almost a third (31%) saying they had not done so because they thought it would be too expensive.
The consultant’s 2021 Protection Report surveyed 2,000 consumers this summer and found the most popular add-on was legal services with over a third (34%) claiming this would lead them to buying a policy.
This was followed by health and wellbeing services (27%), access to virtual GPs (26%) and nutrition and dietary advice (15%).
Elsewhere in the report, the findings showed that nearly half (48%) of those renting privately or living in social housing had not held any protection insurance in the past five years.
Of those that held a protection insurance policy in the last five years, the key motivating factor for purchase was buying a house.
Karen Brolly, head of products, insurance and financial services at Hymans Robertson, said: “It isn’t a surprise that the turbulence of the past 18 months has led people to re-evaluate their priorities and look at whether additional protection could be worthwhile.
“The focus on health has undoubtedly brought this into sharper focus. Yet, despite the demand, cost will always be a consideration so this is something that insurers must be mindful about.”
But Brolly added that it was clear that value-add services were increasingly becoming the norm for protection insurance products.
“The popularity of each different type of services is key to whether, from an insurer perspective, they are a success,” she said.
“For some, the value-add service may be even more of an incentive to buy the product than the original protection insurance itself. Access to legal or health services, for instance, alongside a life insurance policy could give it more comprehensive appeal.”
Brolly noted that challenger banks had forced the traditional banks into transforming outdated offers to keep consumers engaged and this should be noted by insurers.
“Being innovative and forward-thinking about value-add services could be insurers’ way to prevent these new players pushing them out through such a revolution,” Brolly continued.
“Our research indicates that consumers are beginning to realise the benefits of those services currently offered in the market. But there is some way to go.
“It’s vital for insurers to make sure the services added to products are meeting customers’ needs, expectations and demands for real value.”