The pandemic has led more UK adults to buy life insurance but there is still "a significant proportion of the population" that remains without a policy in place, Canada Life has warned.
The pandemic has prompted some 5.8m UK adults to buy - or consider buying - life insurance, according to the insurere.
That’s 11 per cent of the population, and nearly a fifth of this figure, or 1.1m, were between the ages of 18 and 34.
But Canada Life’s protection sales director, Dan Crook, said the share of people without life insurance was still “concerning”, adding: “As an industry we must do all we can to highlight the importance of protection and the peace of mind it provides, both financially and emotionally, before it’s too late.”
Overall, an estimated 37 per cent, or 19.5m, of the UK’s adult population has bought or thought about buying life insurance to date. That’s according to research disclosed to FTAdviser by Canada Life, conducted back in March.
This suggests the health crisis has powered more than a quarter of interest in and uptake of the product during current generations’ lifetimes.
But it also leaves 32.9m, or 63 per cent, of adults in the UK who do not have an active life insurance policy in place.
Research by MoneySuperMarket conducted in January suggested homeowners with dependents were not taking out life insurance due to “widespread myths” about cover.
These included thinking the cover was too expensive and that insurers ‘never pay out’.
But the price comparison site pointed out that the average monthly cost of life insurance per £100,000 of cover was £10.96, less than a quarter of the average household’s streaming services bill.
As for paying out, the insurance industry distributed £6.2bn in life insurance, income protection, and critical illness claims throughout 2020, according to figures published by the Association of British Insurers and Group Risk Development in May.
Alongside the “myths” still plaguing the sector, research by EY conducted last July found consumer behaviour leaned more towards prioritising savings over life or health insurance.
Only 15 per cent of those surveyed told EY they would list life or health insurance as a top three priority to protect their financial wellbeing, compared with 77 per cent prioritising savings.
Clive Allison, UK insurance protection leader at EY, said Covid-19 had “shone a spotlight on longstanding challenges around consumer trust and engagement with core insurance products”.
Canada Life’s data also highlighted a striking gender gap in the uptake and interest in life insurance products. Whilst 14 per cent of the UK’s male population has thought about or bought it, women make up only half (8 per cent) of that number.
Digital players in the insurance market such as London-based start-up Anorak are trying to disrupt the space, to make insurance products more accessible - both to women and younger generations.
The fintech landed £5m in funding earlier this month, and counts investors such as Paul Evans, Allianz’s chairman, and Hollard’s former CEO, Nic Kohler.
Anorak's automated insurance advice platform is integrated into existing partners’ eco-systems, designed to give consumers access to the whole life insurance market.
ruby.hinchliffe@ft.com
