Inflation may have reached its lowest level in two years, but new research from Vitality Life has found financial pressures are still front of mind for many, particularly when considering cancelling or purchasing life insurance.
The company surveyed 2,000 people to identify the top reasons they would purchase or cancel a policy, as well as whether they had considered cancelling their protection in the last 12 months and found a consistent link between financial security and insurance decisions.
While Vitality found that around half of UK adults (56%) would never consider cancelling their life insurance policy, those who would consider it cited losing their job as the biggest reason (13%) closely followed by inflationary increases (12%) and their children needing financial help (9%).
The findings highlight a consistent correlation between life insurance and financial security, with two-thirds (67%) saying they would reinstate a cancelled policy if their finances improved, and of those who have no current policy, a quarter (25%) said their number one reason to take one out would be if they were in a better financial position.
Justin Taurog, Managing Director, VitalityLife said: “The past year has presented a real opportunity and challenge for advisers, and while times have been financially tough for consumers, our findings show they value their life policies. Ultimately, when faced with the need for financial cuts, consumers are assessing the overall value their life insurance policies offer them.
“For us this is where traditional insurance plans fall short; too often bought and forgotten about until a claim needs to be made. It’s why our products and services are designed to become part of their daily life, something they are incentivised to engage with to receive everyday benefits and better health.
“In fact, in 2022 our members received £60m paid back through rewards, with these members saving on average 28% of their premium through these rewards alone. We’ve also seen that our indexation policies have given those worried about inflation peace of mind, with 96% of those with it increasing their cover even when inflation was over 10%.”
