Overall new long-term individual protection sales grew by 2.2% last year, with 2,041,428 new Term Assurance, Whole Life, Critical Illness and Income Protection policies purchased.
But according to the report produced in conjunction with iPipeline, some business lines did not fare as well as others. The breakdown of new purchases in 2024 was:
• Term and critical illness: Total new Term assurance sales, including those with a Critical Illness (CI) benefit decreased by 0.8% (-11,577 policies). In contrast to the total drop, there was (3.6%) Decreasing Term Assurance (DTA) growth, this was a positive step compared to 2023 where sales dropped to their lowest level since 2016. The number of Term assurance-only new policies remained flat.
• Income protection: New income protection policies increased by 18% (vs. 10% in 2023). 49% of new policies sold in 2024 had a limited payment term (LPT). While new two-year LPT policies increased by 1.3% in 2024 (12% in 2023), Normal Retirement Age (NRA) policies that potentially pay benefits up to the policy expiry term increased by 36.6% (vs. 12% in 2023).
• Whole life: The market is yet to recover from the substantial drop recorded in 2022. New guaranteed acceptance whole life purchases fell by 1.5%, while sales of Underwritten Whole Life policies without a CI benefit decreased by 8.2% following several years of continued growth.
Joanna Scott, author of Term & Health Watch 2023 and Technical Manager & Industry Affairs Manager, L&H UKI, at Swiss Re said: “2024 was another busy year in the UK, both politically and economically. In a continued high-interest rate environment with cost pressures mounting for households, it’s encouraging to see so many pockets of positivity – not least in the realm of Income Protection and Decreasing Term sales. This was in no small part down to improvements in the mortgage market.
“Looking ahead, a defining feature of the second half of 2025 will be maturing mortgages from the Covid-19 pandemic house buyers' cohort. With the holders of cheaper fixed-rate mortgages facing an increase in repayments of 200bps-250bps, it will be interesting to see what impact this has on protection take-up.”
Scott says the growth in sales of NRA Income Protection and one- and two-year LPT products is particularly significant.
Scott continued: “The Government is on a clear mission to keep people in work as part of its plans to boost productivity. The Keep Britain Working review, led by Sir Charlie Mayfield, has shone a real light on the role of employers and what they can do. But it has also highlighted the role of income protection insurance in supporting people both financially and medically while minimising Government spending. Sales of NRA and LPT products are now split 51:49. This is hugely positive when considering the potential impact on the welfare state if an employee is unable to return to work before the end of a policy’s payment period. But there is still a long way to go.
Another noteworthy trend was the growth in Stand-alone Critical Illness (SACI) for lower average sums assured. SACI sales increased by 36,497 in 2024, while term with CI sales fell by 11,289. The total number of new CI policies, attached to life cover and stand-alone combined, increased by 2.5%, to 545,251.
Scott continued: “The steep increase in SACI sales suggests that CI sales are slowly becoming less tied to the sale of mortgages as the main distribution channel. It could also be indicative of a trend towards people taking out smaller add-on cover as part of a menu plan.”
More broadly, the last two years has seen a shift towards protection being purchased following financial advice. Non-advised sales fell by 6.5% in 2024, following a much starker 27% drop in 2023.
Paul Yates, Product Strategy Director, at iPipeline commented: "Advisers are increasingly realising greater value from the protection market as they refine their sales and recommendation processes to better meet their clients’ holistic protection needs. Our latest data highlights improved efficiency, with stronger quote-to-policy conversion and a growing preference for multi-benefit plans – increasing product density per client. Multi-benefit plans now represent over a third of all protection sales.”
“We're also seeing a clear shift toward quality over cost, with advisers placing less emphasis on just the lowest-priced options. The continued growth in APE (£) relative to new policy volumes underscores this trend. It's a compelling sign that advisers are delivering more comprehensive protection solutions for their clients."
Swiss Re’s latest Term & Health Watch report
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