Pandemic fears trigger interest in life insurance market - adviser research
Sales down 26% in last five years
Covid-19 has sparked renewed interest in life insurance after five years of falling sales, according to advice firm
Salisbury House said its research shows that sales of life insurance policies were down 26% in the last five years but interest in the product had risen since the pandemic struck the UK in March this year.
It said Financial Conduct Authority (FCA) data, provided to the advice outfit, showed life insurance sales fell from 478,745 in 2015/16 to 353,194 in 2019/20 in the personal investment space.
The value of premiums paid each year also fell from £7.6bn to £4.3bn over the same period, it added.
However, the Leicester-based adviser said the coronavirus pandemic had brought life insurance back into play and providers were adapting their processes in light of the changes.
Managing director Tim Holmes of Salisbury House said: "Coronavirus has brought the need to ensure dependants are financially secure after your death sharply back into focus."
The adviser explained insurers are incorporating Covid-19 related questions into their application process, and for some applicants, that are seen as at risk of contracting Covid-19, it has been reported that applications are being put on hold.
Sailsbury House said there were concerns that frontline workers, such as NHS staff, may find it harder to get life insurance cover.
The advice business also said people with underlying health issues, such as diabetes, which are seen as a risk-factor for Covid-19 may have to shop around to get a sensibly priced policy.
Holmes added: "Although taking out life insurance may not be a popular topic or even a primary concern for many young people, there are distinct advantages of thinking about it early.
"It is possible to lock in life insurance premiums at very low rates if a policy is taken out when someone is in their twenties and thirties. Locking in low rates now means you avoid having to pay much steeper premium's later in life, when you may have more costs to meet."
He added: "It is important savers do not see their pension pots as a possible alternative to life insurance - pension pots are there to ensure you can comfortably see out your retirement and given longer life expectancies, there is unlikely to much left for your dependents."
This article originally appeared on COVER sister title Professional Adviser
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