Direct life insurance

How consumers buy direct life insurance

Our report describes how consumers decide to buy direct life insurance and how they decide how and what to buy. Our sense-making approach to research revealed how some consumers struggle with their experience. These products are complex so consumer understanding of their features is often poor.

Here is an extract:

'Most buyers knew only a little or nothing about life insurance products, did not understand what each type of insurance covered and had not undertaken significant research before their purchase. Indeed, most reported that they had not thought about buying life insurance products beforehand. Rather it was simply something they had in mind before making their purchase decision. This lack of consideration was reflected in the fact that while around half reported they had thought through the type of insurance, the level of cover or the premiums they wanted, few had considered all these elements, or the events or illnesses they wanted to cover or how their medical history might affect their policy.'

Policy case study: structured investments

Retail investor research into structured ‘capital protected’ and ‘capital guaranteed’ investments

‘Capital guaranteed’ or ‘capital protected’ products are complex structured investments that typically offer investors returns linked to the performance of shares or investment markets, with some assurances about the return of their original investment at maturity. Derivatives, such as options, are commonly embedded within the product structure. The purpose of the research was to understand how well informed retail investors were about capital protected and capital guaranteed investments, and to document how these investors chose and evaluated this type of investment.

Our research showed why these investments had appealed to risk-averse investors, despirte some of the inherent risks.

Here is an extract

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