Building financial resilience isn’t just about saving for the future; it’s about being prepared for life’s unexpected turns. James Shattock, Managing Director of UK Protection at Legal & General, explains that many people underestimate the impact a serious illness can have on their income, lifestyle, and long-term stability, and how advisers can strengthen financial resilience through critical illness.
Building financial resilience goes beyond just having savings; it’s about being prepared for life’s unexpected events. Critical illness cover is crucial, yet often overlooked. Many believe critical illnesses won’t affect them, or that their savings or employer benefits will be sufficient. However, a critical illness payout can mean the difference between financial stability and additional strain, providing a lump sum to address major financial obligations like treatment costs, mortgage payments, and childcare.
We know there’s a knowledge gap. Research by the Association of Mortgage Intermediaries’ (AMI) Protection Viewpoint report found that 23% of 18 to 35-year-olds and 19% of 35 to 54-year-olds have no understanding of critical illness products at all. This shows the value of advice and the need for the industry to improve how it engages customers – focusing on building trust and meaningful interactions so people feel confident in their choices.
With data showing that 82% of new critical illness policies are sold through advisers, their guidance is vital in helping clients recognise the value of the cover. By positioning critical illness cover as an essential product, advisers can use real-life scenarios to show how illness could impact income and family stability. Enhanced education and adviser-led guidance are key to integrating critical illness into comprehensive protection planning.
Since 2022, claims for critical illness have risen, with cancer being the most common cause, followed by heart conditions and strokes. In response to evolving customer needs, insurers are enhancing critical illness cover by introducing modular plans with optional benefits, allowing advisers and clients to tailor protection to life stages and budgets. They’re also refining medical definitions and designing severity-based, flexible policies to ensure coverage remains relevant and responsive.
Claims processes are also being improved – for example, L&G now has fully digital submissions for all Retail Protection claims, cutting the average processing time by almost two weeks and making the claims journey quicker and more transparent. We also use enhanced data analytics through our claims assessment model to help speed up critical illness claims by reducing the need for extra medical information and delivering faster customer responses. As an industry, we can make significant progress by listening to customers and adapting to their evolving needs.
