Sorry for interrupting, this website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Learn more
Accept & Close

Whole of Life Insurance - UK - June 2016

“The growth experienced in 2015 is an encouraging sign for a market that has been in decline since 2011. With an ageing population and the ever increasing cost of funerals, the guaranteed acceptance market should be well placed to benefit from these concerns.  However, insurers will need to continue to innovate and bring new benefits to their policies to ensure the market doesn’t lose out to competing products and remains relevant to its target market.”

– Scott McDonald, Financial Services Analyst

This report looks at the following areas:

  • Tackling issues of fairness and value could result in added complexity with over-50s life insurance market
  • A focus on funeral costs could be limiting the reach of over-50s life insurance

With the rising cost of funerals, guaranteed acceptance policies offer peace of mind to the over-50s, allowing them to ensure that when they pass away they will not burden their family with funeral expenses. With the target market set to grow, driven by the ageing population, guaranteed acceptance policies are expected to see a resurgence in sales. At the same time, providers within the underwritten whole of life insurance market are looking at ways of widening the appeal of the product with the addition of long-term care options.

Competition in the guaranteed acceptance market has been increasing in terms of pricing and product developments. Newer entrants such as Royal London and British Seniors have sought to establish a position within the market by offering new benefits, resulting in incumbent providers re-evaluating the products they offer in an effort to remain competitive. Scrutiny from consumer organisations has also prompted providers to look at developing products and additional features to address some of the criticism that has been levelled at the guaranteed acceptance plan market in the past.

What you get

What's included

Why buy from us?

Succeed

Our reports will provide you with market data, consumer research and competitive intelligence to succeed in your market.

Instant Access

Buy now and you'll have instant access to the information you need to make the right decisions.

Opportunities

Find out what's next in the markets that matter to you: where opportunities lie and what challenges you will face.

Trusted

A business Superbrand, Mintel is a source you can trust. We have been defining and refining the Market Intelligence mix since 1972.

Table of contents

  1. Overview

    • What you need to know
      • Report scope and definitions
      • Executive Summary

          • The market
            • 5% increase in policy sales in 2015
              • Figure 1: Forecast for total volume of new guaranteed acceptance plans, 2011-21
              • Figure 2: Whole of life insurance policy sales, by product type, 2011-15
            • Overall premiums have declined by a lower rate than the volume of sales
              • Increase in non-advised sales in 2015
                • Funeral costs continue to rise
                  • Companies and brands
                    • Market concentration has decreased, but SunLife Direct still dominates
                      • Figure 3: Top five providers of guaranteed acceptance plan whole of life policies, 2015
                    • Sale of AXA SunLife leads to uncertainty
                      • The consumer
                        • A fifth have whole of life cover but there is confusion about policies held
                          • Figure 4: Life insurance product ownership, April 2016
                        • Mixed reasons for taking out cover among guaranteed acceptance plan holders
                          • Figure 5: Reasons for purchasing life insurance, April 2016
                        • Negative perceptions continue to undermine market
                          • Figure 6: Consumer attitudes towards guaranteed acceptance policies, April 2016
                        • Free gifts do not resonate as much as product recommendations
                          • Figure 7: Consumer reasons for selecting an insurance provider, April 2016
                        • What we think
                        • Issues and Insights

                          • Tackling issues of fairness and value could result in added complexity with over-50s life insurance market
                            • The facts
                              • The implications
                                • A focus on funeral costs could be limiting the reach of over-50s life insurance
                                  • The facts
                                    • The implications
                                    • The Market – What You Need to Know

                                      • The market saw growth in 2015 and is expected to continue growing
                                        • Overall premiums have declined by a lower rate than the volume of sales
                                          • Increase in non-advised sales in 2015
                                            • Funeral costs continue to rise
                                              • Target market set to increase
                                              • Market Size and Forecast

                                                • Sales rose in 2015…
                                                  • …after period of decline
                                                    • Figure 8: Whole of life and guaranteed acceptance new contracts and premiums, 2011-15
                                                  • Guaranteed acceptance vs underwritten whole of life
                                                    • Guaranteed acceptance policies maintain dominance in terms of volume
                                                      • Figure 9: New contract distribution, by product type, 2011-15
                                                    • Whole of life new premiums surpass guaranteed acceptance
                                                      • Figure 10: Value of new whole of life and guaranteed acceptance premiums, 2011-15
                                                  • Market Forecast

                                                    • Guaranteed acceptance plan market set for growth
                                                      • Figure 11: Forecast for total volume of new guaranteed acceptance plans, 2011-21
                                                      • Figure 12: Forecast for total volume of new guaranteed acceptance plans, 2011-21
                                                      • Figure 13: Forecast for total value of new guaranteed acceptance plans, 2011-21
                                                      • Figure 14: Forecast for total value of new guaranteed acceptance plans, 2011-21
                                                    • Forecast methodology
                                                    • Channels to Market

                                                      • Growth in underwritten whole of life non-advised sales
                                                        • Figure 15: Whole of life and guaranteed acceptance sales channels, 2014 and 2015
                                                      • Advisers still have a place in the market
                                                        • Figure 16: Consumers’ preferences when arranging life insurance, April 2016
                                                      • Online sales remain niche but with room to grow
                                                      • Market Drivers

                                                        • Target market for over-50s life insurance continues to grow
                                                          • Figure 17: Population projections, 2016-40
                                                        • The cost of funerals continues to rise
                                                          • Prepaid funeral plans increase competition
                                                            • Financial security is mixed among over-50s
                                                              • Figure 18: Consumers current financial situation, by age, April 2016
                                                              • Figure 19: Value of savings and investments, by age (over-45s only), April 2016
                                                            • Repairing reputations to improve consumer perceptions
                                                            • Regulatory and Legislative Changes

                                                              • Inheritance tax changes to undermine underwritten whole of life sales…
                                                                • …but providers are looking to long-term care to reinvigorate the product
                                                                  • Potential changes to funeral subsidies available from the government
                                                                    • The Scottish burial and cremation bill
                                                                    • Key Players – What You Need to Know

                                                                      • Market concentration has decreased but SunLife Direct still dominates
                                                                        • Proposed sale of SunLife to Phoenix Group
                                                                          • Product developments focus on improving fairness
                                                                            • Expanding the reach of whole of life policies
                                                                            • Market Share

                                                                              • Market concentration has decreased
                                                                                • Figure 20: Top five product providers, measured by new individual whole of life sales*, 2015
                                                                              • SunLife dominates the market again…
                                                                                • …although this could be about to change
                                                                                • Competitive Strategies

                                                                                  • Royal London and British Seniors seek to address concerns about product fairness
                                                                                    • Driving premiums lower
                                                                                      • Insurers create strong relationships with well-known brands
                                                                                        • Figure 21: Selected distributors and underwriters of guaranteed acceptance plans, as of May 2016
                                                                                      • Additional funeral benefits
                                                                                        • Engage Mutual becomes One Family following merger
                                                                                          • VitalityLife looking to expand reach of whole of life policies
                                                                                          • Launch Activity and Innovation

                                                                                            • Royal London – Flexible premiums and protected payout
                                                                                              • British Seniors – Lifetime Payback Guarantee
                                                                                                • SunLife introduces a premium cap
                                                                                                  • VitalityLife launches an early-access whole of life policy…
                                                                                                    • …and looks to make policies more affordable upfront
                                                                                                      • AIG and Zurich also extend care cover to whole of life market
                                                                                                        • Cigna launches partially underwritten over-50s plan to affinity market
                                                                                                          • Promis Life launches a funeral plan
                                                                                                            • LifeQuote adds whole of life comparison service
                                                                                                            • Advertising and Marketing Activity

                                                                                                              • Over-50s life insurance adspend increases in 2015/16
                                                                                                                • Figure 22: Total above-the-line, online display and direct mail advertising expenditure on life insurance products, 2013/14-2015/16
                                                                                                              • SunLife continues to dominate over-50s life insurance adspend
                                                                                                                • Figure 23: Total above-the line, online display and direct mail advertising expenditure for top 10 advertisers of over-50s life insurance, 2013/14-2015/16
                                                                                                              • Top four providers all increase adspend activity…
                                                                                                                • …through different strategies
                                                                                                                  • Figure 24: Total above-the line, online display and direct mail advertising expenditure of over-50s life insurance, by media type, 2015/16
                                                                                                                • Other advertising activity
                                                                                                                  • Nielsen Ad Intel coverage
                                                                                                                  • The Consumer – What You Need to Know

                                                                                                                    • A fifth have whole of life cover but there is confusion about policies held
                                                                                                                      • Mixed reasons for taking out cover among guaranteed acceptance plan holders
                                                                                                                        • Free gifts do not resonate as much as product recommendations
                                                                                                                          • Negative perceptions continue to undermine market
                                                                                                                            • Short-term finances are a priority for lower income groups
                                                                                                                            • Life Insurance Ownership

                                                                                                                              • Nearly half of over-50s have life insurance…
                                                                                                                                • …but some are confused by what type of cover they hold
                                                                                                                                  • Figure 25: Life insurance product ownership, April 2016
                                                                                                                                • Competition with prepaid funeral plans
                                                                                                                                  • Guaranteed acceptance ownership is higher among 55-74-year-olds
                                                                                                                                    • Figure 26: Product ownership, by age, April 2016
                                                                                                                                • Reasons for Purchase

                                                                                                                                  • Mixed reasons for taking out whole of life insurance
                                                                                                                                    • Figure 27: Life insurance purchase triggers, by product ownership, April 2016
                                                                                                                                  • More people taking out cover to pay for funeral…
                                                                                                                                    • Figure 28: Consumers’ reasons for purchasing life insurance, 2014 and 2016
                                                                                                                                  • …and to leave a cash gift for loved ones
                                                                                                                                    • Being able to cover the mortgage is a growing concern for over-50s
                                                                                                                                    • Factors Influencing Choice of Provider

                                                                                                                                      • Brand name/ familiarity is key to choice of provider
                                                                                                                                        • Free gifts are not enough to entice customers
                                                                                                                                          • Consumers value family and friends’ opinions
                                                                                                                                            • Figure 29: Factors influencing choice of provider, April 2016
                                                                                                                                        • Attitudes towards Over-50s Life Insurance

                                                                                                                                          • Negative publicity is still affecting the market…
                                                                                                                                            • …although product developments are addressing some of the concerns
                                                                                                                                              • Figure 30: Consumer attitudes towards guaranteed acceptance policies, April 2016
                                                                                                                                            • Fewer than one in ten intend to take out an over-50s policy
                                                                                                                                              • Some have not heard about guaranteed acceptance policies
                                                                                                                                                • Figure 31: Consumers’ agreement with statements regarding guaranteed acceptance policies, by age, April 2016
                                                                                                                                            • Attitudes towards Planning for the Future

                                                                                                                                              • Leaving an inheritance is important to over-50s
                                                                                                                                                • One in four over-50s think savings accounts are better than purchasing life insurance
                                                                                                                                                  • Figure 32: Consumers’ attitudes towards planning for the future, April 2016
                                                                                                                                                • Short-term finances are a priority for lower income groups
                                                                                                                                                  • Almost a fifth do not believe it is worth worrying about the future
                                                                                                                                                  • Planning for Funeral Expenses

                                                                                                                                                    • Nearly half will use savings and value of estate to pay for their funeral
                                                                                                                                                      • A fifth expect to use a life insurance plan
                                                                                                                                                        • No expectation that the state will pick up funeral costs
                                                                                                                                                          • Figure 33: Funeral cost planning, April 2016
                                                                                                                                                      • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                          • Abbreviations
                                                                                                                                                            • Consumer research methodology
                                                                                                                                                            • Appendix – Market Size and Forecast

                                                                                                                                                              • Best- and worst-case forecasts for guaranteed acceptance plans
                                                                                                                                                                • Figure 34: Best- and worst-case forecast for total volume of new guaranteed acceptance plans, 2015-21
                                                                                                                                                                • Figure 35: Best- and worst-case forecast for total value of new guaranteed acceptance plans, 2015-21
                                                                                                                                                              • Forecast methodology

                                                                                                                                                              Companies Covered

                                                                                                                                                              To learn more about the companies covered in this report please contact us.

                                                                                                                                                              Whole of Life Insurance - UK - June 2016

                                                                                                                                                              US $2,648.76 (Excl.Tax)