Confusion around underwriting and pricing is discouraging many consumers from taking out life insurance, with women, Millennials and Gen X among the most affected groups, research commissioned by UnderwriteMe revealed.
The study of 2,000 adults found that pricing uncertainty is a key frustration, with over half of respondents (51%) saying they would feel frustrated if an initial quote increased after answering detailed underwriting questions.
This sentiment was even stronger among women, with 55% expressing frustration compared to 47% of men.
Women were also more likely to cite cost as a barrier, with 34% saying life insurance is too expensive compared to 30% of men.
Despite two-thirds of respondents (66%) recognising that factors such as medical history, occupation and lifestyle influence pricing, confusion remained widespread.
Nearly a quarter (24%) said they were unsure how these factors affect the final price, while 10% did not believe they had any impact at all.
Barriers to taking out cover were significant across the population, with 61% of UK adults reporting at least one obstacle.
Cost was the most common concern, with 32% worried about affordability, while 21% were unsure whether insurers would pay out.
A further 14% described the process as complicated or overwhelming, and another 14% said they do not know where to start or who to trust.
For 11%, life insurance is simply something they intend to deal with later.
The research also highlighted clear generational differences.
Younger adults were more likely to feel unsure about how to begin, with 20% of those aged 18 to 34 expressing this concern, compared to 15% of those aged 35 to 54 and just 8% of those aged 55 and over.
Cost concerns were highest among Millennials and Gen X, both at 36%, while Gen Z were more likely to find the process confusing or overwhelming.
Meanwhile, uncertainty about whether insurers will pay out was most pronounced among Gen X, at 27%.
Nilesh Patel, chief revenue and customer officer at UnderwriteMe, said: “Most people understand why life insurance matters, but lack of clarity around how the process works is putting people off, leaving them lacking vital protection from a product that should be essential.
“Cost worries play a big part here, but uncertainty about what will influence the final price can be just as significant.
“When quotes change or the purpose behind certain questions is not fully understood, it can create doubt.
“For some people that doubt is enough to delay a decision, even if they recognise the value of having that protection in place.”
Patel added: “There is also still a clear confidence gap around underwriting. If the process feels unfamiliar or unpredictable, people can assume it will be more complicated than it is.
“Technology is now enabling real-time underwriting so this is a solution that can help deliver results quickly and help advisers with getting applications over the line without delays.”
Roy McLoughlin, board member of the Protection Distributors Group, added: “PDG’s recent Protection Insights Report highlighted that despite adviser optimism around protection, there is room for improvement across the market.
“The lack of adviser confidence in underwriting was also a key issue, with nearly 6 in 10 (59%) respondents saying inefficient underwriting was a key barrier to writing more protection.
“There is clearly frustration amongst advisers about unnecessary underwriting delays, additionally ratings and premiums can be difficult to explain to the customer six months down the line once the underwriting is completed.
“This can in turn cause consumer confusion around the process and pricing.”
He continued: “If the fear is consumers are abandoning the journey due to confusion around the process or pricing it is incumbent that the advisory community, in collaboration with insurers, work together to make the taking out of protection a far smoother process than it currently is.
“Underwriting needs to be slick, speedy, and easy to navigate which will certainly help adviser confidence and consumer confidence and uptake of protection policies.”
