How lifestyle insurance has become widespread

This article is part of
Guide to lifestyle insurance

What it does

So what exactly is this new breed of lifestyle insurance? It is basically, as Andy Coles, development director at Lutine Insurance (part of Direct Group) explains, “a short-term income protection plan that is gaining in popularity as buyers do not wish to commit to long-term policies and the level of underwriting that is required in application”.

He points to figures from the latest Swiss Re report, which shows a significant change in sales of two-year short-term income protection products, the “lifestyle end of income protection”.

According to the figures from 2015-2016, there has been a 38.4 per cent increase in sales of the two-year product, compared with sales of ‘until retirement’ income protection products, which have seen an 11.3 per cent drop.

Table: Swiss Re report on growth of short-term insurance products




% Change 2016/2015

IP to “retirement age” (excluding LPT)




Income protection 1 year




Income protection 2 year




Income protection 5 year




Income protection 'other'




Example of how lifestyle insurance works: 

By way of example, Aviva offers a form of lifestyle insurance which is a form of short-term income protection policy, available on its Income Protection+ product (called the limited payment term option). 

It is available only through the advised market, and pays a benefit for up to 24 months for each claim. Julie Higman, income protection product manager for Aviva, outlines: “This can be made up of one claim of 24 months, or a number of smaller claims for the same condition, totalling 24 months.

“The customer can claim again for a further 24 months for the same condition, provided they return to work for at least six consecutive months. They can also claim for another condition for 24 months.”

Welcome addition to the toolkit

Many advisers and insurance intermediaries have welcomed the growing availability of this form of short-term policy. 

The Source, a provider of general insurance products to the IFA and financial advice market, recently created a new panel of products for advisers, which includes a new short-term income replacement product from Maltese insurer Building Block. 

Andrew Sajo, head of strategic relationships for The Source, said this would be popular with advisers, especially as it had carer cover and career support services as standard.

Emma Thomson, life office relationship manager for Lifesearch, comments: “In the UK, we have many short-term income protection plans available that can pay out for one, two or five years.

“Some income protection cover also continues to provide cover when the policyholder has a short career break.

“Some of these plans also do specifically cover bills and expenses, with clients listing what they need cover for.”