Protection message is still falling on deaf ears

Even in these challenging times, when many households are still reeling from the awful legacy of coronavirus, it remains a difficult sell.

‘It will never happen to us,’ seems to be the stock answer when households are challenged on why they do not have any cover – ‘it’ standing for either death (sadly, it happens to us all) or being struck down by a serious illness such as a heart attack or cancer (these impact more people than most realise).

Of course, insurance companies and ambassadors for the financial protection industry do their bit by waving the flag for the comfort that critical illness, income replacement, family income benefit and life cover brings to households.

Across its financial protection product range, Aviva paid 98 per cent of claims, with £38.9m being coronavirus related

But the flag does not get noticed. All too often, it gets lost among the other flags that scream ‘new car’, ‘new television’ or ‘feed my Isa’.

Earlier this month, insurer Aviva released its latest claims data, for calendar year 2020. They were an impressive set of numbers as Aviva revealed it paid more than £1bn in claims – £2.85m for every day of the year.

Across its financial protection product range, it paid 98 per cent of claims, with £38.9m being coronavirus related.

"In a year like no other," says Jacqueline Kerwood, the insurer’s claims manager, "the most important outcome for Aviva is that we were there to help more than 50,000 individual protection customers and their families. We are proud of the scale of what we do, but behind every claim we know there is an individual most likely going through the worst time of their lives and our focus is always to support them with empathy, respect and care".

Lovely words that you do not often hear muttered by representatives of the financial services industry. Yet, apart from a few protection journalist geeks like myself and a number of trade papers that specialise in insurance, they – and the figures they referred to – largely fell on deaf ears. For sure, they were not met with a wall of new applications for Aviva life cover.

The same happened when Zurich said in March that it had paid out £354m of claims in 2020, and when Aegon followed shortly afterwards by saying it had paid out nearly £140m. Silence was the overwhelming response, although I did give the numbers a mention in a column for FTAdviser that was published on April 1 (not as an April fool, I hasten to add).

Traditionally, the industry has brought to life the value of its cover by providing case studies of customers who have made successful claims. I have used a number of these in articles I have written on protection insurance, although I am not sure they have the intended outcome (demonstrating the value of cover). Invariably, the only feedback I get is from readers whose claims were declined and who want me to take up the cudgels on their behalf.

Yet a few days ago, I was drawn to a post on LinkedIn that highlighted an altogether different approach to demonstrating the benefits of protection insurance.

It was from Emma Astley, a director of insurance broker Cover My Bubble, who is determined to spread the word about the importance of financial protection cover. It related to Neil Grimes, a 31-year-old husband and father from Lancashire, who has stage four cancer and is terminally ill. On his own admission, he will be lucky to see out 2021.

Neil has no life cover, no critical illness or income replacement cover, so the financial future for his wife Ella is somewhat bleak. There is a mortgage to pay and a young child (a four-year-old boy Owen Lee) to bring up. Neil is no longer working and the family car has already been given up because they cannot afford the finance on it.  

Yet Neil is determined not to leave this world quietly. He has taken to social media to tell people not to fall into the trap that he did – that is, push away the need for protection insurance on the grounds they are too young to ever be impacted by serious illness.  

I spoke to Neil at length last week. I was instantly struck by his humility. "People are quite happy to purchase insurance for their mobile phone," he said, "but not when it comes to protecting their loved ones. If between now and my death I can help persuade more people, based on my difficult financial situation, to think of the comfort blanket that protection insurance provides a family with, I will feel as if I have done some good."

"Inspirational" is the word Cover My Bubble’s Astley uses to describe Neil’s determination to raise awareness about the importance of protection cover.

Wouldn’t it be wonderful if it triggered a spike in sales. We live in hope.

Jeff Prestridge is personal finance editor of the Mail on Sunday