25 May 2018

State of the Protection Nation

8 min read

Lorna Wiltshire
Lorna Wiltshire

Lorna Wiltshire, Corporate PR Manager


  • Consumers believe protection is expensive
  • Consumer inertia is also stopping them from buying protection 
  • Education is the key to removing the barriers

The results of Royal London’s second State of the Protection Nation report reveal that the top reason people gave for not taking out protection was that they think premiums are too expensive (69%). They also believe they won’t get ill and they don’t need insurance. Despite this many people want to protect their lifestyle and loved ones from the financial impact of dying or becoming seriously ill. Nearly half of advisers (49%) feel that consumer inertia is one of the greatest barriers to people buying protection, sending out a clear message that education is key to removing the barriers.

It won’t happen to me

Nearly half of the people surveyed (46%) felt they were unlikely to go on sick leave for three months or more, 44% thought they were unlikely to have an accident that meant they were unable to work and a third (34%) felt it was unlikely they would contract a serious health condition or illness. Research from Pacific Life Re1 shows that the chance of being off work for two months or more before age 65 is 26% for males and 37% for females.

Even if illness struck nearly half (43%) felt they could manage for a year if they were unable to work due to serious illness or injury, 55% said they would manage for six months and 71% would manage for three months. Yet the reality is only 2 in 5 could survive financially for more than six months if they were unable to work.


Despite only a small percentage of consumers saying they had life insurance (3%), critical illness cover (3%) and income protection (5%) through their employer, the majority of people felt they didn’t need income protection (58%), critical illness cover (47%) and life insurance (34%). The industry and advisers believe in the value of products available, but consumers are still reluctant to buy insurance.


The results revealed inertia plays a part in people’s decision not to buy, as 20% of full-time working people recognise they need income protection but don’t have a policy. Over a third (38%) of people working full-time feel they don’t need income protection, but just 8% said they didn’t need it because they had cover with their employer.

Our figures show that 58% of people with a mortgage have life cover in place if the home owner dies, leaving 42% unprotected. But worryingly 71% of people with a mortgage would have no protection in place if they were diagnosed with a critical illness, and 81% of mortgage owners have no income protection in place. The reason this is concerning is that people are far more likely to be diagnosed with a critical illness or have an injury that stops them working than to die before retirement age so more people should consider critical illness or income protection.

A quarter (25 %) of people who don’t own any life insurance, critical illness cover or income protection said they were confident that this lack of cover was in line with their needs. This figure doesn’t get much better when we look at those in full time employment (30 hours a week or more) with 27 % saying they were confident.

Toby Bainbridge, Head of Protection Solutions at Royal London said:

"State of the Protection Nation research reveals that the industry has work to do, to change people’s mindset, so they see protection as a necessity instead of something they don’t need. Sadly it’s only when illness strikes or an accident happens that people realise how valuable the financial protection from an income protection or critical illness plan can be. This will be a challenge to overcome as time and again people say insurance is expensive and won’t payout which clouds their view of the market. We need a concerted effort by the industry to address these misconceptions.

Buying a home and starting a family are still the two main triggers for buying protection, but this leaves working renters vulnerable to losing the roof over their head if illness or an accident struck and they were unable to work. The need to protect their lifestyle is just as important as it is for homeowners."

More than two thirds of advisers feel that consumers who reject protection do not recognise the benefit. For around half of advisers the challenge is their clients don’t believe they will get ill. However, advisers are upbeat and optimistic, predicting a stable market for sales in 2018 and reporting that last year was a good year for protection sales. Advisers see the ageing population as the biggest opportunity for sales. The rising costs of living, lack of income growth and consumer inertia are seen as the biggest barriers along with aggregator sites.

Now in its second year Royal London’s State of the Protection Nation report looks into people’s perception of the protection industry and the suitability of the products. Over time it will build an index into consumer and adviser confidence in the protection industry. This year consumer confidence remains stable rising one point to 54.2. Adviser confidence fell by just one quarter of a point to 60.5 showing advisers remain more confident in protection products than consumers.*

A webinar on the report findings will be aired on 31 May at 2.00 pm and will also be available on demand afterwards. Presented by Toby Bainbridge, the webinar looks at how advisers can overcome client objections and ways to bring the subject of protection into more conversations with clients. Advisers can register at https://www.brighttalk.com/webcast/16373/319109

Here The State of the Protection Nation report is available to download.

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For further information please contact:

Lorna Wiltshire, Corporate PR Manager

Note to editors

  1. Source: Pacific Life Re, March 2018. These figures have been produced based on their interpretation of the Institute and Faculty of Actuaries’ Continuous Mortality Investigation insured lives incidence rates together with their estimate view of future trends. Incidence rates for the entire population may be different to those lives that take out insurance products. 
  2. *The consumer confidence rating is 54.2 out of 100. The Consumer Index takes into account consumers’ awareness, usage and confidence in protection products. The Adviser confidence rating is 60.5 out of 100. The Adviser Index takes into account advisers’ perceived relevance of protection products and their ability to meet or adapt to consumers’ needs. 
  3. Omnibus research was conducted by Opinium. 2,005 UK adults aged 18+ were surveyed from 9 to 12 January 2018. Results have been weighted to nationally representative criteria. 
  4. Opinium conducted a survey of 200 interviews with UK IFAs from the 10th to 17 January 2018.

About Royal London:

Royal London is the largest mutual life, pensions and investment company in the UK, with funds under management of £117 billion, 8.8 million policies in force and 3,745 employees. Figures quoted are as at 30 June 2018.