The Syndicate: Customers cancelling policies due to perceived 'poor value'

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 The Syndicate: Customers cancelling policies due to perceived 'poor value'

A lack of perceived value in protection policies is leading to cover being cancelled, according to a report from The Syndicate, the research arm of Protection Review.

When researching people who had held protection and health insurance products, many had subsequently cancelled their cover because they didn't see the benefit in them.

Others felt they had better things to spend their money on, or had changed their mind during the cooling off period - all pointing towards them not seeing enough value in the cover they had purchased.

Of those who had ended their cover, life insurance to protect people's business had the highest proportion of policies being cancelled due to a lack of perceived value (40%).

This was followed by critical illness cover (38%), income protection (36%), private medical insurance (25%), life insurance to protect the family (24%) and mortgage payment protection insurance (23%).

Another significant reason for people's insurance lapsing was that it ended when they left an employer, which is particularly relevant for private medical insurance (38%)

Almost a quarter (22%) of those cancelling critical illness cover had done so due to affordability, the highest of all products, followed by income protection (19%).

Peter LeBeau, of The Syndicate said: "A recurring theme of this part of our research is that one way or another, the value of insurance is not being conveyed to those that hold it. To those who have protection, the products can feel expensive or benefits were not realised, which is leading to policies being cancelled.

"As long as the benefits and values that insurance can offer are not adequately conveyed at the point of sale, and reinforced throughout the life of the policy, this will continue to be the case."

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