New research from Vitality has revealed that the current economic climate is leaving people debating the need for protection.
The research has shown that nearly two in five adults in the UK (37%) have never switched or cancelled a life insurance policy, with a quarter having never switched or cancelled an income protection policy (27%) or Serious Illness Cover policy (28%) respectively, which suggests those who have these policies in place better appreciate the value.
Despite this, roughly one in five of them are currently considering switching these policies, and more concerningly, more than one in ten would consider cancelling all together, with one in seven (13%) of these saying they would consider cancelling life insurance now, in light of the cost of living crisis. What’s more, many people don’t see insurance as necessary, as only three in ten (29%) of those surveyed said it was a non-negotiable financial priority.
What’s particularly alarming from the research is that people are considering cancelling protection policies even though they had originally taken them out to protect their family should they need it. In fact, a third of people with life insurance took it out to make sure their family would be provided for should something happen to them (31%) and around a quarter (24%) to be as prepared as possible.
For people with an income protection policy, a quarter of people (25%) said they had taken it out to make sure their family would be provided for if they couldn’t work due to ill health and 23% took it out to be as prepared as possible. With income protection paying a regular payment if they were unable to work due to ill health, it’s unsurprising that 19% said they had taken it out to make sure their outgoings would be covered if they were unable to work.
Andy Philo, Strategic Partnerships Director at Vitality, said: “Our research has shown protection policies are far from immune from the impact of the cost-of-living crisis. With households up and down the country prioritising their current outgoings, it’s important they are reminded why they took their protection policy out in the first place and the safety net it provides them.
“At Vitality we have always recognised the importance of providing members with ongoing value throughout the lifetime of their policy, going far beyond only being there at point of claim. This data shows how crucial that is right now. Through the Vitality Programme Life customers can access a comprehensive range of discounts and rewards every week, in return for making positive health and wellbeing decisions. Additionally, by adding optimiser to their policy, members can receive up to 40% off their premiums if they keep active.
“As the economy faces more uncertainty, and savings are under pressure and people are thinking about where and how they can save money, it’s never been more important that people know the full value of a protection policy.”