Over a quarter or 26% of UK workers have cancelled insurance policies in the past year due to financial strain, according to research conducted by The Exeter.
Compared to 2022, the proportion of employees cancelling policies because of rising living costs almost quadrupled, rising from 4% to 7%.
The research also reveals an increase in the number of people cutting back on their pension contributions, going from 4% to 9% for comparable reasons.
The 2023 Health and Financial Fears report reveals a change in consumer preferences towards private health solutions. Demand for these plans has increased by 11%, outpacing interest in income protection and life insurance by 5%.
According to the research, policy cancellations are caused by a variety of factors, such as insufficient claims (24%), perceived lack of value (14%), unclear reasons (12%), and unclear product purpose (5%).
The Exeter director of distribution and marketing Steve Bryan says: “The increase in the number of people who state they have cancelled insurance products due to financial pressures is disheartening but not surprising in the current economic climate.
“More concerning are the number of people who state they have cancelled a policy because they did not see value in the product they had purchased – including those who had not claimed. This highlights the valuable role that advisers play when recommending cover to clients. It also underlines the need for insurers, advisers, and policyholders to build ongoing relationships throughout the life of a policy.
“Frequent adviser reviews of a client’s needs and regular engagement from insurers are key to ensuring that cover remains fit for purpose and that policyholders are fully aware of the benefits offered within their policies.”