30+ UK life insurance industry statistics, facts & trends 2024

In this article, we are looking at life insurance industry statistics in the UK to understand how big is the UK life insurance market and what are the key concerns that influence its growth, including costs, demographics, understanding, and life insurance payout rates.
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Updated: Apr 19, 2024
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Life insurance policies provide coverage should the insured person die. The money left behind helps dependents to cover costs and make ends meet. But up to 77% of people in the UK have no life insurance, leaving their loved ones unprotected should the worst happen. 

In this research & statistics article, we dig into life insurance industry statistics in the UK to pinpoint the reasons behind the massive decline in insurance rates. What percentage of the UK population has life insurance? How many people have life insurance in the UK? What are the market factors that drive purchases? Curious to find out? Invezz.com got you covered. We will be looking at UK life insurance industry statistics and trends.

Key takeaways

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  • The life insurance rate among UK adults stood at 29% in 2022.
  • 77% of UK workers have no life insurance.
  • The life insurance rate among UK workers fell sharply from 31% in 2022 to 23% in 2023,  amidst the cost-of-living crisis.
  • The UK life insurance market size shrunk by 8.5% in 2023 to £65.4 billion.
  • Households earning less than £15k per year showed the sharpest drop in life insurance coverage.
  • Cost is the major barrier to life cover, with 37% of uninsured individuals citing affordability issues in 2024.
  • Affordability is the most appreciated selling point of life insurance according to 40% of UK workers.
  • The primary reasons for buying life insurance in the UK are mortgage requirements and fears of unexpected events, each at 26%.
  • Nearly 1 in 5 life insurance holders did not read their policy documentation at all.
  • Life insurance ownership among Millennials rose to 45% in 2022, marking them as a key demographic for businesses.
  • People in couples are 2.3x more likely to hold life insurance compared to single individuals.
  • The average monthly life insurance premium in the UK was £26 in 2023, though UK workers overestimated it to be £35.20.

General UK life insurance industry statistics

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1. About 3 in 10 Brits had life insurance in 2022.

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A survey by the Financial Conduct Authority revealed that 29% of UK adults held life insurance in 2022. This is down from 30% in 2020. 

If you’re curious to know how many people have life insurance in the UK, that’s about 15.5 million people.

Source: FCA, Office of National Statistics

2. The life insurance rate among UK workers dramatically dropped to 23% in 2023.

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More recent data specifically looking at the UK workforce identified a dramatic drop in life insurance rates – from 31% in 2022 to 23% in 2023.

Almost 9 in 10 workers changed their spending habits to make ends meet amidst the UK cost-of-living crisis, the survey by the insurance company The Exeter further revealed. As a consequence, the number of those canceling insurance policies has almost doubled.

Source: The Exeter

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As of 2024, about 49% of Brits with life insurance reported having a whole of life cover. Following were term life insurance (36%), terminal illness cover (33%), and over 50s life cover (24%).

As the name implies, term insurance covers a limited number of years, while whole of life insurance lasts for the policyholder’s lifetime.

Source: U.S. News & World Report

4. In the UK, life insurance purchases are mostly prompted by mortgage requirements (26%) and fears of unexpected events (26%).

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Another two frequently cited reasons in the 2024 survey were family protection in case of the breadwinner’s death (21%) and becoming a parent (20%).

Source: U.S. News & World Report

5. Cost is the biggest barrier to buying life insurance in the UK.

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As of 2024, about 37% of those without life insurance reported that they can’t afford it right now, making this the primary barrier. Another 36% said they don’t need such a policy, and 20% felt life insurance was too complicated as a product. 

Monthly life insurance payments may not be affordable amidst the cost-of-living crisis when household finances have worsened for many consumers.

Source: U.S. News & World Report

6. Affordability is the biggest selling point for life insurance in the UK.

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It’s no surprise that affordability was most valued among 40% of the UK workers, surveyed by The Exeter. But other noteworthy selling points were the quality of the product (26%) and customer service (11%).

Source: The Exeter

Life insurance demographics statistics

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7. About 40% of mortgage holders don’t have life insurance.

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While not legally mandatory, you’re advised to buy life insurance when you take out a mortgage. But statistics from the Financial Conduct Authority show that just 60% did so in 2022, meaning that millions of people in the UK are putting their families at financial risk should the worst happen.

Source: FCA

8. Men (31%) are more likely to hold life insurance than women (28%).

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In 2022, the share of women carrying life insurance policy dropped to 28%, per UK life insurance industry statistics by the Financial Conduct Authority. 

Meanwhile, male ownership remained stable throughout 2020-2022, at 31%.

Source: FCA

9. Life insurance ownership increased the most for Millennials to reach 45% in 2022.

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Data from the same report demonstrated that Millennials are the most promising market for life insurers. Between 2020 and 2022 life insurance holding within the segment increased by 3% to reach the levels among those aged 45. 

This is against a backdrop of overall stagnating life insurance holding rates and a fall among Baby Boomers.

Source: FCA

10. Life insurance holding dropped most sharply among households with incomes of less than £15k.

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As Brits grapple with the cost-of-living crisis, insurance policies become a luxury for many. It comes as no surprise that low-income households are reducing life insurance spending the most. 

Moving on with FCA’s report, life insurance holding rate among households with incomes of less than £15k stood at 12% in 2022, down from 15% in 2020. This is the least insured group.

Source: FCA

11. People in couples are 2.3 times more likely to have life insurance than single individuals.

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As of 2022, about 32% of people living in a couple had life insurance, compared to just 16% of single people. This huge insurance gap can be explained by the shared responsibilities and fears of financial losses in case of unexpected events, particularly concerning a breadwinner.

Source: FCA

Life insurance awareness and understanding statistics

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12. Less than half of life insurance holders shopped around before purchase.

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This means that the majority (52%) jumped straight into the purchase and didn’t take the time and effort required to compare two or more products. People didn’t compare because they believed in a recommendation (32%), the life insurance was arranged by the employer (15%), or simply because it was too complicated (12%).

To set this in context, life insurance products were least carefully considered, according to the 2022 life insurance industry statistics in the UK report. Significantly more Brits did some research before buying insurance for their pet (72%) than for their life (48%).

Source: FCA

13. One in 8 Brits don’t know how they purchased their life insurance.

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In the UK, most people (69%) purchased their life insurance policies indirectly, typically through a financial adviser (23%), insurance broker (16%), or a price comparison website (15%). But a significant fraction, or about 13%, had no idea how they made this purchase.

Source: FCA

14. Almost 1 in 5 life insurance holders didn’t read policy documentation at all. 

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As of 2022, the majority of policyholders (76%) didn’t read their policy documentation carefully. Among them, 18% didn’t read documentation at all.

Source: FCA

15. The majority of life insurance holders (83%) believed they understood what the policy covers them for.

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Despite not thoroughly reading the documentation, in 2022 most policyholders (83%) said they understand what their life insurance covers. This false confidence might leave millions unprotected.

Source: FCA

UK life insurance market size statistics

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16. The UK life insurance market size was estimated at £65.4 billion in 2023.

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This is down 1.4% from 2017, when market revenues stood at £66.3 billion. During COVID-19 the market soared, but it returned to the pre-pandemic levels in 2023.

Source: FT Adviser

17. The UK life insurance market size shrunk by 8.5% in 2023.

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In 2022, the UK life insurance market size reached a decade high at £71.4 billion but shrank to £65.4 billion the following year. The importance of life insurance peaked during the pandemic but wore out soon after.

Source: FT Adviser

18. As of 2022, UK life insurance businesses had a 63% market share of the total insurance market. 

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The life insurance market share in the total insurance market significantly dropped by 7% in 2022 compared to the previous year.

The life coverage contribution has squeezed as Brits deal with tightened budgets. Still, life insurance remains the most commonly held protection policy in the UK.

Source: OECD 

19. As of 2024, there are 328 businesses competing in the life insurance industry.

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The number of insurance companies operating in the UK has consistently declined over the past few years. IBIS World estimates an annual drop of 1.5% between 2018 and 2023.

Source: IBIS World 

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In 2024 the revenues of Legal & General Group plc were estimated at £14.2 billion, or 35% of the total revenues in the UK life insurance industry.

The Prudential Assurance Company Ltd (18%) and Aviva plc (17%) make up the rest of the top 3 in terms of UK life insurance market share by company.

Sources: IBIS World

21. The top four businesses in the UK life insurance industry have more than 70% market share.

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This means that the market concentration is high. The market is dominated by a few large businesses with established brand names, and there is little room for challengers.

Source: IBIS World

Life insurance loyalty statistics

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21. Good policy cover (24%) and good reputation (16%) were the leading reasons for choosing a life insurance provider in 2022.

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People choose one life insurance company over another for various reasons, both rational and emotional. While good policy cover is the top consideration, cited by 24% of Brits in 2022, brand perceptions are closely following, at 16%.

 Source: FCA

22. Switching rates are lowest among life insurance providers, at 8%.

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Many policyholders are prone to switching providers when it comes to motor insurance (53%) or contents and buildings insurance (50%), but not when it comes to life insurance (8%).

Source: FCA

23. 17% of life insurance policy owners were considering switching their provider in 2022.

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Loyalty in past does not necessarily translate into brand loyalty in the future. Just 68% of life insurance policyholders were planning to stay with their current provider in 2022. About 17% were planning to switch, and 14% hadn’t decided yet.

Source: FCA

24. Potential switchers decided to stay due to provider satisfaction (35%), but hassle avoidance followed closely (28%).

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Most life insurance policy renewers who ever considered switching eventually stayed because they were happy with their existing provider (35%), or because it was too time-consuming (28%) or difficult (17%). 

Source: FCA

Life insurance payout rates

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25. In the UK, 53,105 new life insurance claims were paid out in 2022.

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However, approximately 1,646 claims were not paid out. According to the Association of British Insurers, the key reason for declined claims is customer non-disclosure of vital information during policy application.

Source: Association of British Insurers

26. In 2022, 96.9% of life insurance claims were paid out.

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This is lower than the consistent 98% acceptance rate among all claims in the UK insurance industry. 

Source: Association of British Insurers

27. Life insurers paid out £3.91 billion in 2022.

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This takes up about 57% of the total of £6.85 that protection insurers paid out that year.

Source: Association of British Insurers

28. The average value of a life insurance claim paid was £73,578 in 2022.

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In comparison, the average payout for critical illness was £66,296, and for income protection – £21,913.

Source: Association of British Insurers

Average life insurance rates statistics

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29. The average pay for life insurance in the UK was £26 per month in 2023. 

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Estimates were provided by the insurance company The Exeter. But you should know that average life insurance rates greatly vary depending on factors such as age and health.

Source: The Exeter 

30. 37% of UK workers overestimated average life insurance rates.

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While the average pay for life insurance in the UK was £26 per month in 2023, UK workers wrongly overestimated it at £35.20. This is 35% more than the actual cost.

Source: The Exeter 

31. About 39% of uninsured people are willing to pay less than £10 monthly for life insurance.

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When asked how much they are willing to pay for life insurance, most participants without one said less than £10 a month in a 2024 survey. 

This is rather unrealistic. The average pay for life insurance in the UK  indeed starts at £10 per month, but the mean value was £26 in 2023. Someone young aged 35 should normally pay £10-£15 a month, but the sum doubles for someone aged 45, and so on. 

Source: U.S. News & World Report

Final notes 

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The life insurance industry in the UK has suffered dramatically from the cost-of-living crisis, with most families looking for ways to save money. Hence, the UK life insurance market size has dropped since 2017, facing challenges to influence people to spend more than £10 monthly for life insurance. Also worthy of note are the figures that point to habitual buying of life covers with many people not shopping around or ever reading documentation.

But beyond cost life insurance industry statistics in the UK show opportunities for differentiation through customer service and targeting growing segments like Millennials. Overall, while the life insurance sector remains a critical component of financial planning for many and some better awareness of average life insurance rates can bust affordability myths.



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Delyana Georgieva
Data Analyst
Delyana is a Data Analyst at Invezz, an experienced market researcher and content creator. Prior to joining Invezz, she worked at marketing agencies and for an... read more.