It might not be something that you want to consider, but life insurance plays an important role in planning for your family’s financial future. We explored the latest statistics to find out how prepared the UK is for death. After all, as Benjamin Franklin said, “In this world, nothing can be said to be certain, except death and taxes”.
Life insurance falls under the broader category of protection insurance. Protection insurance includes life insurance but also other types of insurance, such as income protection and serious illness insurance.
It’s estimated that 35% of the adult population in the UK have life insurance, which equates to around 18.8 million people. People are not restricted to one life insurance policy or income protection policy.
Each policy taken out is unique – but how often do insurers typically pay out for life insurance and how much?
| Type of policy | Number of claims paid | Average value of claims paid | Percentage of claims paid |
|---|---|---|---|
| Whole of life | 213,064 | £4,054 | 99.99% |
| Life insurance | 53,105 | £73,578 | 96.90% |
| Income protection | 22,542 | £21,913 | 84.40% |
| Critical illness | 19,218 | £66,296 | 91.60% |
| Total permanent disability | 342 | £70,414 | 70.30% |
| TOTAL | 308,270 | / | 97.50% |
Life insurance protection policies have decreased since 2014. In 2021, there were 20.4 million policies taken out, which is 30% less than in 2014 (29.3 million).
| Year | Protection policies |
|---|---|
| 2014 | 29,300,000 |
| 2015 | 28,600,000 |
| 2016 | 26,900,000 |
| 2017 | 25,700,000 |
| 2018 | 25,200,000 |
| 2019 | 23,700,000 |
| 2020 | 20,700,000 |
| 2021 | 20,400,000 |
Life insurance premiums take the majority of the market share of total insurance premiums. Since 2000, life insurance has averaged 71% of the insurance premium market share. The last year of data was 2021, where life insurance market share was 70%. In 2007, the market share stood at its highest level at 83%.
| Year | Year |
|---|---|
| 2000 | 72.30% |
| 2001 | 66.20% |
| 2002 | 63.10% |
| 2003 | 58.90% |
| 2004 | 61.80% |
| 2005 | 64.40% |
| 2006 | 79.60% |
| 2007 | 83.20% |
| 2008 | 76.30% |
| 2009 | 76% |
| 2010 | 73.60% |
| 2011 | 73.50% |
| 2012 | 75.40% |
| 2013 | 72.40% |
| 2014 | 73.40% |
| 2015 | 73.30% |
| 2016 | 68.80% |
| 2017 | 69% |
| 2018 | 72% |
| 2019 | 72.60% |
| 2020 | 70.50% |
| 2021 | 70.49% |
In 2022, cancer (34.2%) was the biggest reason for a life insurance claim. Heart-related claims were second at 21%, followed by neurological reasons (6.1%), Pneumonia (4.1%) and COPD (3.9%). COVID-19 claims accounted for 13%. However, this figure plummeted in 2022 to 1.3% of all claims paid. The number of COVID-19 claims dropped from 10,606 in 2021 to 3,846 in 2022.
| Reason for taking out life insurance | Percentage |
|---|---|
| Cancer | 34.20% |
| Heart related | 21% |
| neurological | 6.10% |
| Pneumonia | 4.10% |
| COPD | 3.90% |
| Other | 30.70% |
Matt Mckenna
UK Head of Communications
T: +44 20 8191 8806
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