Over a quarter (26 per cent) of UK workers have cancelled insurance policies in the past year, citing financial pressure as the primary reason.
Research from the Exeter found that, compared with 2022, the number of workers cancelling policies in response to higher living costs has almost doubled from 4 per cent to 7 per cent.
Additionally, there was a similar increase in the number of people cutting back pension contributions for the same reason, rising from 4 per cent to 9 per cent.
The Exeter director of distribution and marketing, Steve Bryan, said: “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.”
The research also found 24 per cent of respondents cancelled policies in the past year as they had never made a claim and an additional 14 per cent said they did not recognise the value of their cover.
Additionally, 12 per cent could not specify reasons for cancellation and 5 per cent were unclear about the purpose of the product.
As a result of these findings, The Exeter advised that, given 40 per cent prioritise affordability when considering insurance products, it’s “crucial” that consumers fully understand the products they are purchasing.
Bryan adde this “highlights the valuable role that advisers play when recommending cover to clients” and 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,” he added.
tom.dunstan@ft.com
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