Some insurers are already exploring this. As an example, on its new Plus income protection products, The Exeter includes a guaranteed insurability option that enables policyholders to increase their benefit on the third policy anniversary, and every three years after that. The maximum uplift is the lower of 20 per cent or £500, and identical to the increase offered for the more traditional triggers.
Reaching out
There are clearly advantages to taking out cover while still young, but interest from this age group remains stubbornly low. A variety of reasons are suggested for this, including the cost of cover, a lack of trust in insurance, and even the belief that they are invincible.
However, Iona Bain, founder of the Young Money Blog and Young Money Agency, says it is often down to something much simpler. “Young people do not even know what protection is,” she explains.
“This lack of awareness is an enormous initial barrier.”
It is easy to see why awareness is so low. Protection is often introduced when someone is buying their first home. But with home ownership no longer regarded as a life goal by an increasing number of young people, they can miss out on learning about protection. Similarly, the banking sector’s decision to step away from financial advice means this source of protection information has also dried up. Given this, it is important to find new ways to raise awareness.
Social interaction
For Kathryn Knowles, managing director at Cura Financial Services, social media provides the ideal medium to engage with potential clients of all ages. Her company is active on Facebook, Twitter and Instagram and has run bold campaigns to bring protection to new audiences.
These include a Game of Gnomes, where anyone completing the quiz was assigned a character dependent on their protection needs; a zombie infographic in the style of TV series The Walking Dead that outlined the protection needs of different characters; and a series of ‘human’ videos that see Ms Knowles sitting on her sofa with a cup of tea answering questions about protection.
Ms Knowles adds: “People want more humour. Insurers, and especially compliance, are scared to do anything different, but we need to find new ways to raise awareness of protection and gain consumer trust. We have been promoting the fact that the industry pays more than 90 per cent of claims for years, but consumers put more faith in the articles in the newspapers about claims being declined.”
There are some signs of change. In the US, Legal & General America launched SelfieQuote last year, enabling users to obtain a life insurance quote by submitting a selfie. Although further underwriting is required, this uses facial analytics technology to estimate details such as age and body mass index.
