In the past 18 months the acceleration of digital solutions has also gathered pace, but are digital solutions, including price comparison sites, really the right way to help close the protection gap?
I would argue they are not.
The challenge with comparison sites is that people using them buy on price. This is fine to pick an electricity provider but creates an inherent conflict with protection which really needs to be bought on benefits not cost.
The biggest problem is that people don’t know which option to go for. So, for example, they may see Aviva Basic critical illness cover on the comparison, and then Aviva Upgraded a few positions down the list which may be £3 more expensive. So how would an average consumer know the difference between the basic and upgraded versions?
The difference may be significant, for example the upgraded version may cover a diabetes diagnosis, or non-invasive breast cancer, whereas the basic version wouldn’t. But the majority of people are not going to read through the key features documents of each product to know this.
Interpreting questions
The second issue is, when completing the application form for a protection product, many consumers struggle to answer the questions correctly. Particularly for something more complex like critical illness as the application will contain more complex medical questions than one for life cover.
However even with simple life assurance, clients often don’t know how to interpret some questions. Very often they need guidance and additional explanation from an adviser.
This is concerning, not only because they may not get the cover that they need, but they may even invalidate the product they do purchase by providing incorrect or incomplete answers. I have seen cases where people have paid for years into a policy that will never pay out for them because they answered the questions incorrectly on their application.
For example, they didn’t disclose past medical problems like, for example, abnormal smear tests, or mental health issues. This can have a massive impact on the way the policy is underwritten.
The benefit of advice
A trained adviser on the other hand, will know what to pay attention to.
They will be able answer the client’s medical questions in a way that can speed up the process dramatically. We’re talking the difference between an application being accepted in a day or two as opposed to it being ‘stuck in underwriting’ for weeks or months.
If a client’s case is hard to place because of previous illnesses, an adviser who knows what they are doing will phone multiple – often smaller – providers to find a solution for even the most challenging cases. These are solutions that most comparison systems wouldn’t even have available.
More worrying, is someone thinking there is no protection solution for them – either from the comparison site, or a broker for whom this is not their specialism.
They may then go through life without the cover they need because they believe they are uninsurable. The only way to ensure that someone genuinely gets the cover they need is to speak with a protection specialist, where even the most challenging cases can be catered for.
