Consumers believe their savings would be more useful to them if they were off work for more than six months than income protection, research has found.
The finding comes from The Syndicate's annual report which conducted a survey of 34,000 adults to investigate how consumers plan for the future.
Speaking at the report's launch at the National Liberal Club in London, Paul Casey head of marketing and communications at Hanover Re said: "We're getting a pseudo-insurance mentality, put something away in case it's needed for a rainy day."
He added: "We are not really a nation of savers, the economic data shows that from 1997 to 2008 there was a steady drop off in people actually saving, with the downturn, saving and people paying down debt saw a spike, that only lasted for about three years and since 2011 saving again started to drop off."
Critical illness cover was thought the most useful policy by 27% of those surveyed. Meanwhile 34% thought the state would be most useful support system if they were unable to work.
The least popular option was loans, which were thought useful by 12% of consumers surveyed.
The survey also found that 24% of consumers thought income protection would not deliver what it promised, compared to 16% for life and 22% for critical illness cover.
When asked if they knew someone who had had a positive experience of an insurance claim, just 8% of those surveyed said yes.
Life was the policy that the most of those surveyed would recommend to someone, 23% would recommend it compared to 8% for income protection.
When asked if an auto-enrolled scheme through their employer would make more people take out an income protection policy 48% said yes , 29% said no and 23% didn't know.
Peter le Beau, chair of the Income Protection Task Force, said: "We know that insurance protects risk, but actually the insurance itself is seen as a risk by consumers. They enter into it, they feel no great certainty about whether or not they're going to be protected at the other end. That's a bad place to start from."
He added: "The research this year shows very definite evidence of people having an insurance mentality, that's fantastic. People do want to protect what matters to them. There's a downside here, they just don't see insurance as the best way to do it.
"It might seem a bit perverse them having the insurance mentality but as long as it doesn't involve the insurance, that's a challenge, they're not convinced what we have to offer them is the best way of going forward."