Life insurance – are protection products providing an adequate solution?

On behalf of Royal London, Opinium ran their State of the Protection Nation research to find out how people felt about their own protection needs and the industry as a whole.

Does everyone need protection?

The survey found that almost half (47%) of all respondents say life insurance is essential for anyone with a mortgage or dependants. The research revealed differences across the age ranges with 58% of those aged 55+ believing that life insurance is essential if you have a mortgage or dependants, but just 37% of 18- to 34-year-olds feeling the same.

What’s consistent across these age groups is recognising a need for protection cover doesn’t necessarily translate into an action to buy.

A quarter of UK adults that were surveyed have a life insurance policy (26%), but just 6% have critical illness cover and 4%have income protection. Perhaps unsurprisingly, those with children under 18 are more likely to have all types of cover than those without, as shown below:

  • Income protection (with children 8% vs 2% without)
  • Critical illness (with children 11% vs 4% without)
  • Life insurance (with children 35% vs 22%)

One fifth of advisers (21%) had seen an increase in the amount of life insurance they had sold in the past 12 months compared to the previous year.

Are the products available suitable for customers’ needs?

The research found that consumer confidence in the ability of protection products to provide a solution to individual needs is low. This is particularly apparent in the 55+ age group where over half (53%) disagree with the statement ‘protection insurance products provide a real and genuine solution to my needs’.

Despite this lack of confidence, those in the 55+ age group were the most likely to have life cover (30%).

For the other age groups, confidence in the ability of protection products to provide a solution to individual needs is slightly higher. Almost one in three (29%) 35- to 54-year-olds don’t believe that protection insurance offers a solution to their needs compared to almost one in six (18%) 18- to 34-year-olds. This suggests that younger generations are more open to the idea that protection could provide a solution to some of their financial needs, but that we have some work to do to engage with this group.

By comparison, just 3% of advisers feel that protection products are failing to provide a real and genuine solution to customers’ needs.


Read more about this research here.