The current economic climate with the rising cost of living is prompting people to question the need for protection, according to research from Vitality.
The product provider surveyed 2,000 Brits and found 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%), which suggests those who have these types of cover in place better appreciate their value.
Despite this, roughly one-in-five of them are currently considering switching these policies, and more concerningly, more than one-in-10 would consider cancelling all together, with 13% saying they would consider cancelling life insurance now, in light of the cost of living crisis.
Many people don’t see insurance as necessary, as only 29% of those surveyed said it was a non-negotiable financial priority.
The research also found that the people considering cancelling protection policies originally took 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, 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.
Understand full value of policies
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.
“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.”