A study carried out by Scottish Provident has revealed that many consumers consider protection insurance, such as life insurance, critical illness cover and income protection, as nice-to-have rather than a necessity.

The findings revealed that nearly 75 per cent of those consumers without insurance considered that they were less likely to be affected by a serious illness than those who had cover.  Nearly two thirds of consumers said that in the event they suffered a long-term illness that they would return to work within six months.

Specialist protection adviser, Lifesearch, commented that Scottish Provident’s findings were not surprising.  It said that many Britons tend to perceive financial protection as not being overly important.  For instance, more people have mobile phone insurance than critical illness or income protection insurance.  However, when the unexpected does happen it can severely harm the finances of those consumers’ that don’t have adequate protection cover.

Many in the industry have been saying that more needs to be done by the Government and employers in promoting the benefits to consumers and employees of having adequate protection cover in place to protect income and families.

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The demand for private medical insurance in the UK has increased despite the downturn in the UK economy which has lead to both businesses and consumers having less money to spend.

The Association of British Insurers (ABI) has produced figures which reveal that just over 6 million consumers in the UK were covered by either personal or corporate private medical insurance schemes during the past year.  This represents a rise of nearly 3 % in the number of consumers covered by private medical insurance.

The ABI noted that this increase in the number of consumers being protected by private medical insurance was good news for both businesses and the UK economy since it enabled those employees off work due to injury or illness to get back to work and become productive again much sooner than if they had relied on the NHS for treatment.  If those employees had been relying solely on the NHS for treatment then it is likely they would be off of work for months, rather than weeks – which would be a drain on the finances of both businesses and the UK economy.

 BUPA, the UK’s leading provider of private medical insurance, has determined that more and more consumers are seeking to use private health care facilities because of demand for cleaner hospitals and quicker access to specialists and lower waiting times.

If you would like more information on private medical insurance or to obtain a quote please review our health insurance section in the menu to the side.

A report issued by the regulator of the financial services industry, the Financial Service Authority (FSA), has revealed that a shocking 70% of consumers purchasing a critical illness policy during a direct (or execution-only) sale believed they were being given regulated, financial advice.

In it’s report, the FSA noted that in critical illness sales where regulated financial advice was actually given, the role of financial advisers was central to the consumer’s decision to purchase the cover. The FSA noted that in many such cases the financial adviser was the primary reason for convincing consumers why critical illness insurance was an appropriate need for them. For instance, 90% of policyholders sold critical illness insurance by a financial adviser recall the adviser verbally explaining the product and nearly all, some 95 %, described the advice process as helpful. The FSA’s research revealed that in cases where regulated financial advice was given, the policyholders were heavily reliant on the adviser to provide them with sufficient information about the risks and features of the critical illness policy sold to them.

However, the FSA’s report indicates that there is a grey area regarding consumers’ understanding of what constitutes an advised and non-advised sale (direct or execution-only sale) when they purchased their critical illness insurance. The report also found that there a significant proportion of consumers with a critical illness insurance policy who don’t fully understand the product, including what it covers, and, perhaps most importantly, what it doesn’t cover. For instance, 46% of consumers believed they were covered for all types and severity of cancer, and 71% believed they were covered for all types and severity of at least one type of condition they were asked about.

While the FSA’s report concluded that critical illness insurance distributors are failing to orally disclose sufficient policy key features to enable consumers to make a informed decision when purchasing cover, financial advisers fared better.

Critical illness insurance is a long term insurance policy which provides a lump sum payment to the policyholder on the diagnosis of certain conditions and / or diseases which are life threatening or debilitating, but not necessarily fatal, such as a heart attack, cancer, stroke, multiple sclerosis and loss of limbs.

The conditions and illnesses covered will be specified in the policy conditions, together with any exclusions and limitations. It is important to note that the terms and conditions differ between insurers, so it is a good idea to compare critical illness quotes to find the most suitable policy for your circumstances. Critical illness insurance typically only pay out a lump sum once, so is not an income replacement policy.