Debbie Kennedy, Chief Executive at LifeSearch, takes us through the key trends that shaped the protection market in 2025, and explains why 2026 must be the year of meaningful reform.
Estate planning:
“The recent changes to inheritance tax rules have brought estate planning into the mainstream, and we’ve seen the impact in 2025. More consumers are seeking joined-up protection that safeguards families tax-efficiently, particularly as the proposed changes to pensions for inter-generational wealth transfer take effect.
At LifeSearch, we’ve seen a notable increase in Whole of Life enquiries and consumers looking to cover gifts – often because they’re moving money from pensions early to make regular gifts to family members. When multiple gifts are involved, the inheritance tax mitigation becomes significantly more complex.
Effective protection advice in this space must account for both current and future mitigation needs. Throughout 2025, our specialist advisers have prioritised three critical areas: placing policies in trust to keep them outside the estate, building in indexation so cover keeps pace with rising property values, and ensuring clients fully understand the long-term implications of their decisions.”
AI:
In the last 12 months, we’ve seen AI increasingly transform every touchpoint of the customer journey, from initial protection search and engagement through to underwriting triage. The front door to protection is changing – ChatGPT is the fifth most popular website, and LLM-powered websites are more customer-centric, concise and contextual. My hope is for better engagement with customers now at the earliest stage, when they are starting to explore what life insurance is and how it can help them.
Last month, the government announced a major set of reforms to put AI at the heart of the UK’s national renewal, and we need to adopt that mindset for our industry as well. We must be mindful of the risks as AI should serve customers’ needs first by enhancing advice and suitability, not just accelerate sales.”
Looking ahead to 2026:
“The FCA’s protection market study presents a pivotal opportunity. Not for vague recommendations or incremental tweaks, but for definitive action and clarity that unlocks genuine access for consumers.
“The current landscape is too restrictive. Distribution models built around single-tie and limited-panel arrangements create artificial boundaries. These structures exclude people who don’t fit neat criteria – those with medical histories, unconventional employment, or tighter budgets.
The protection gap isn’t really about people who’ve never considered cover. It’s about people who’ve tried and been turned away or never attempted because they assumed they’d be rejected. We’re failing customers with pre-existing conditions, self-employed workers, and anyone whose life doesn’t match the ‘ideal’ risk profile.
Growing this market requires structural change, not just better marketing. We need distribution that’s genuinely whole-of-market, not constrained by commercial arrangements. We need underwriting that starts from ‘how can we say yes?’ rather than ‘why should we say no?’ And we need advice pathways that recognise real people live complex lives.
The opportunity is significant, but only if 2026 delivers meaningful reform – not more discussion.”
