A study conducted by financial mutual Scottish Friendly has found that rising inflation is causing more than one in five (22%) over-50s life insurance customers to contemplate cancelling their monthly premiums due to the ongoing cost-of-living crisis.
This move could jeopardise their cover and potentially leave them with nothing.
The research, which surveyed 1,000 over-50s, discovered that women are the most affected, with 28% considering stopping their payments into their over-50s life insurance plans, compared to just 17% of men.
Of the respondents with an over-50s life insurance plan, 57% took out a policy to cover funeral costs, 46% sought to provide financial support for their families in the event of their death, and 9% initiated a plan to help pay off their mortgage.
As inflation, which reached an annual rate of 10.4% in February, continues to strain people’s incomes, consumers are exploring ways to reduce their expenses.
The survey highlighted that payment certainty and lower premiums are the most attractive features to potential new customers.
Guaranteed cover was the top priority for 35% of respondents, followed by low monthly payments (31%) and fixed monthly premiums (27%).
Jill Mackay, head of marketing at Scottish Friendly, said: “Dealing with price rises is particularly difficult for those on fixed incomes, such as those in retirement.”
She urged customers to think carefully before cancelling their life insurance cover, as doing so risks ending the policy and potentially not getting back what they paid in.
Mackay emphasised the importance of speaking to the provider before making any final decisions, noting that the best over-50s life insurance policies may offer payment flexibility and a proportion of the cash benefit if customers stop paying in.
