Many people don’t fully understand the meaning and function of many protection policies, the Association of Mortgage Intermediaries has found.

Ami carried out a survey of 5,000 people to find out why more are not buying protection plans alongside their mortgages, and discovered that while 62 per cent of those asked knew what critical illness insurance is, just 31 per correctly identified income protection from its description.

Furthermore, 42 per cent of people mistook income protection for accident, sickness and unemployment protection.

When given a description of accident sickness and unemployment cover, 44 per cent of respondents said it was income protection versus 36 per cent who identified it correctly.

The research also found an issue with trust. When asked if they trusted the percentage that insurance companies provide as successful claims paid out, 43 per cent of respondents said they don’t trust the figures very much and 14 per cent said they don’t trust them at all.

Meanwhile, 37 per cent said they trusted them a fair amount and 6 per cent they did so by a great deal.

Alongside this, Ami found that while 97 per cent of advisers say they include a protection conversation as part of their mortgage application process, only 36 per cent of clients remember this happening.

On top of this, 52 per cent of clients believe that the motivation behind a protection policy is to earn commission for the adviser while 27 per cent say it is to ensure the client is financially protected.

Ami chief executive Robert Sinclair says: “The UK consumer does not understand or want to comprehend the difference between general insurance, life insurance or insurers with asset management and pensions activities.

“Any activity in one impacts all, unless we make that difference. Our research shows a great opportunity for advisers to engage more with customers. Coronavirus and the fear it has created, opens opportunity.

“Consumers recognise buying a first home and moving home as two of the top three reasons to buy protection, meaning mortgage advisers are in the ideal position to raise and discuss protection during these life stages.”

Legal & General director of intermediary insurance Craig Brown adds: “This new research tells us advisers raise the subject of protection on almost every mortgage sale. However, the majority of customers don’t remember it being mentioned. This suggests that a communication gap exists between what advisers think they are transmitting versus the messages customers are actually receiving.

“There is perhaps a need for more structured protection conversations – or maybe more conversations with protection specialists.

“As well as mortgage customers, it is also important that renters have access to protection insurance as they can often be more financially vulnerable than homeowners. As an industry, we need to support mortgage and renters’ needs through tailoring both product development, advice and technology, because this is a growing demographic.”