Furthermore, over half of consumers do not believe claim statistics that point to a high pay out rate from insurers.
The findings were revealed in an industry report titled The New Protection Challenge that examined consumer and adviser perceptions of protection and how it was sold.
In the report, AMI chief executive Robert Sinclair (pictured) said it was “good news” that protection was on advisers’ agenda with 97 per cent of brokers surveyed stating it was part of their client interview.
But with only 36 per cent of consumers claiming to recall the conversation, Sinclair said the message wasn’t always getting through.
Sinclair said the research indicated advisers should re-consider how they raised protection and whether it was just a brief mention or note in the customer’s documents.
Meanwhile, 52 per cent of borrowers felt an adviser’s motivation for suggesting a protection policy was to earn a commission rather than help them to be financially protected.
Explain wider benefits
To combat consumers’ mistrust of protection and adviser motives for recommending it, Sinclair said advisers needed to demonstrate the wider benefits that policies can offer such as mental health support and 24/7 remote GP access.
The report also revealed that buying a house or moving home were two of the three key drivers to buying protection, while home insurance was considered the most important insurance policy, and less than a third of UK adults knew what income insurance was.
Sinclair said: “The challenge our industry faces is how do we get the consumer onside and trusting this market during their journey through mortgage advice to protection advice.
“The research shows a great opportunity for advisers to better engage with customers. Our collective task is to encourage advisers to rise to the New Protection Challenge.
“We appreciate the partnership with Legal & General and Royal London to deliver this work of scale and would like to thank the many advisers who contributed to the report.”
AMI has also set up the Protection Specialists Group which will be made up of heads of protection, proposition directors and practitioners across a range of firms, networks and mortgage clubs.
“The purpose of the group is to focus on pure protection and general insurance issues, providing insight and front-line experience into issues and opportunities facing the market,” Sinclair said.
“The group will help shape AMI’s policy and lobbying positions and develop future strategy in the protection arena. The AMI board wants to hear more from this group as there is a need for representation of member firms that distribute and provide advice on protection products, as this is a core aspect of work that member firms undertake.
“The group will discuss and debate topics that are currently relevant to general insurance and protection products and affect a mortgage intermediary firm. This will include: market issues, regulatory consultations, industry collaboration.”