Record uptake in income protection insurance

The Association of British Insurers (ABI) has released new data revealing a substantial rise in the uptake of individual income protection insurance, marking a record high in sales within the UK’s individual protection insurance market.

Standalone critical illness sales have seen an almost fourfold increase compared to a decade ago. This comes as mortgage-related term assurance sales dip in line with a slowdown in the UK housing market.

In 2023, new individual income protection policy sales reached 247,000, up 16% from 2022 and the highest since ABI began tracking this data in 2000. The prominence of advice in these sales, with 97% of individual income protection products sold with professional guidance, underscores the critical role advisers play in enhancing financial security.

The ABI’s figures also shed light on the broader individual protection market, showing a slight decline in overall sales of individual contracts to the lowest volume since 2018. Despite this, the sales of standalone critical illness policies grew by 7% in 2023 to 75,700, significantly higher than figures from ten years prior.

Yvonne Braun, director of policy, long term savings, health, and rotection at the ABI, said: “Financial resilience – the ability to withstand a financial shock – is a hugely important issue. It’s encouraging to see that so many people recognise that income protection and critical illness insurance are an important part of financial planning and play a crucial role in providing a financial safety net.”