Table of Contents
Executive Summary
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- Impact of COVID-19 on over-50s life insurance market
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- Figure 1: Short, medium and long-term impact of COVID-19 on over-50s life insurance, December 2020
- The market
- A period of impressive growth comes to an end in 2020…
- …but the market is expected to bounce back quickly
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- Figure 2: Forecast of new over-50s guaranteed acceptance life insurance premiums, 2015-25 (prepared on 2 December 2020)
- Figure 3: Forecast of new over-50s guaranteed acceptance life insurance volume sales, 2015-25 (prepared on 2 December 2020)
- Most new over-50s policies arranged without advice
- The target market for over-50s life insurance policies is growing
- Companies and brands
- SunLife the unrivalled market leader
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- Figure 4: Top five product providers, by number of new guaranteed acceptance whole-of-life providers’ sales, 2019
- COVID-19 outbreak leads marketers to slash adspend
- The consumer
- 14% of over-50s have over-50s life insurance cover
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- Figure 5: Life insurance product ownership, September 2020
- Target market more open to prepaid funeral plans than over-50s cover
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- Figure 6: Over-50s life insurance products that over-50s would consider arranging, September 2020
- Covering funeral costs is the top reason for buying over-50s cover
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- Figure 7: Main reason for having arranged or considering arranging an over-50s life insurance policy, September 2020
- Most over-50s plan owners confident about their policy coverage
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- Figure 8: Agreement with statements about the purchase and ownership of over-50s life ownership, September 2020
- Independent sources of product information are viewed as most trustworthy
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- Figure 9: Most trusted sources of over-50s life insurance product information, September 2020
- Product flexibility is valued by the target market
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- Figure 10: Most important features and benefits of an over-50s life insurance policy, September 2020
- COVID-19 has prompted one in five over-50s to think about life insurance options
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- Figure 11: Agreement with statements about life insurance and personal finance, September 2020
Issues and Insights
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- COVID-19 could lead to a rethink in over-50s life insurance advertising
- Enhancing flexibility is key to attracting new customers
The Market – Key Takeaways
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- A period of impressive growth comes to a halt in 2020…
- …but the market is expected to bounce back swiftly
- Target market for over-50s life insurance policies continues to grow
- Older age groups are more tech-savvy than ever before
- FCA issues guidance on helping policyholders facing financial difficulty
- Prepaid funeral plans set to fall under the remit of the FCA
Market Size and Forecast
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- Ageing population and innovation will drive market forward post-crisis
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- Figure 12: Short, medium and long-term impact of COVID-19 on over-50s life insurance, December 2020
- COVID-19 puts an end to two years of strong growth
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- Figure 13: Value and volume of new over-50s guaranteed acceptance life insurance premiums, 2015-20 (prepared on 30 November 2020)
- Market expected to return to growth in 2021
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- Figure 14: Forecast of new over-50s guaranteed acceptance life insurance premiums, 2015-25 (prepared on 2 December 2020)
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- Figure 15: Forecast of new over-50s guaranteed acceptance life insurance premiums, 2020-25 (prepared on 2 December 2020)
- Figure 16: Forecast of new over-50s guaranteed acceptance life insurance volume sales, 2015-25 (prepared on 2 December 2020)
- Figure 17: Forecast of new over-50s guaranteed acceptance life insurance volume sales, 2020-25 (prepared on 2 December 2020)
- Market drivers and assumptions
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- Figure 18: Key drivers affecting Mintel’s market forecast, 2015-25 (prepared on 2 December 2020)
- Learnings from the last recession
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- Figure 19: Value and volume of new over-50s guaranteed acceptance life insurance premiums, 2007-15
- Forecast methodology
Channels to Market
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- Most over-50s policies are sold without advice
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- Figure 20: Percentage of new over-50s guaranteed acceptance life insurance premiums, by volume, by sales channel, 2015-19
Market Drivers
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- By 2023 almost one in two UK adults will be 50 or older
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- Figure 21: UK population projections, by age, 2018-28
- Life expectancy at age 50 increased in 2019
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- Figure 22: Change in life expectancy at age 50, by gender, 1998/2000-2017/19
- Property ownership among older adults in decline
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- Figure 23: Housing tenure of 55-64 year olds, 2006/07-2018/19
- Working lives are being prolonged
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- Figure 24: Employment rate among UK over-50s, by age, 2000-Q2 2020
- The gap in internet use among older generations has narrowed
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- Figure 25: Online behaviour, by age, September 2020
Regulatory and Legislative Changes
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- FCA issues guidance about assisting those facing financial difficulty
- Prepaid funeral plan market to be regulated by the FCA
- CMA funerals market investigation demands greater transparency
Companies and Brands – Key Takeaways
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- SunLife remains the unrivalled market leader
- Pandemic pushes providers to focus on flexible payment terms
- Healthcare-related benefit could signal a new approach
- COVID-19 outbreak leads marketers to slash adspend
Market Share
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- SunLife remains the unequivocal market leader
- Promis Life enters the top five
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- Figure 26: Top five product providers, by number of new guaranteed acceptance whole-of-life providers’ sales, 2019
Competitive Strategies
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- COVID-19 response
- SunLife
- Royal London
- AIG
- British Seniors
- Legal & General
- Promis Life
- Strategic Partnership Activity
- AIG now focused exclusively on underwriting policies via partnerships
- Santander and Aviva renew life insurance distribution partnership
- Royal London expands partnership with Cover Direct
- Increased availability of over-50s plans on comparison services
- Online protection comparison platform, Choozi, adds over-50s plans
- Cavendish Online launches over-50s life insurance comparison service
- Providers continue to include new policy benefits and features
- Legal & General adds Nurse Support Services to Sainsbury’s Bank-branded cover
- OneFamily makes £300 of Funeral Funding a standard feature of its cover
- Welcome gifts remain a popular customer acquisition strategy
Advertising and Marketing Activity
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- Over-50s life insurance adspend falls by 12% in 2019/20
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- Figure 27: Total above-the-line, online display and direct mail advertising expenditure on over-50s life cover, 2015/16-2019/20
- Adspend plummets in Q2 2020 due to COVID-19
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- Figure 28: Total above-the-line, online display and direct mail advertising expenditure on over-50s life cover, quarterly change on previous year, Q1 2017-Q2 2020
- SunLife and Royal London account for most industry adspend
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- Figure 29: 10 biggest spenders on above-the-line, online display and direct mail advertising expenditure on over-50s life cover, year to 31 July 2020
- TV and direct mail account for most spend
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- Figure 30: Total above-the-line, online display and direct mail advertising expenditure on over-50s life cover, by media type, 2015/16-2019/20
- SunLife spreads its budget across the range of media types
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- Figure 31: Total above-the-line, online display and direct mail advertising expenditure on over-50s life cover, by media type and leading advertiser, year to 31 July 2020
- Nielsen Ad Intel coverage
The Consumer – Key Takeaways
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- Consumers are more open to prepaid funeral plans than over-50s cover
- Most policyholders are confident about their policy coverage
- Consumers trust independent sources of product information
- Product flexibility valued by the target market
- COVID-19 has prompted one in five to think more about life insurance
Impact of COVID-19 on Consumer Behaviour
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- Concern about exposure to coronavirus rises as second wave hits
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- Figure 32: Level of concern about risk of exposure to COVID-19, February-November 2020
- Over half of over-55s are worried about being exposed
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- Figure 33: Level of concern about risk of exposure to COVID-19, by age, 2-11 November 2020
- Consumers’ sense of financial wellbeing still holding up
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- Figure 34: The Financial Wellbeing Index, January 2015-October 2020
- Household finances stabilised by government aid and reduced spending
- Increased focus on finances could benefit over-50s plan providers…
- …however, many are feeling worse off than they did prior to COVID-19
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- Figure 35: Changes in household finances, January 2015-October 2020
Life Insurance Ownership
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- Note about consumer research
- Two in five over-50s have some form of life insurance
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- Figure 36: Life insurance product ownership, September 2020
- Over-50s life cover ownership highest among over-75s
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- Figure 37: Life insurance product ownership, by age and gender, September 2020
- Nearly a quarter of over-75s have a prepaid funeral plan
- A third of renters own over-50s cover or prepaid funeral plans
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- Figure 38: Life insurance product ownership, by housing tenure, September 2020
Consideration of Over-50s Life Insurance
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- Prepaid funeral plans more likely to be considered than over-50s cover
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- Figure 39: Over-50s life insurance products that over-50s would consider arranging, September 2020
- Openness to taking out cover is highest among under-65s
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- Figure 40: Over-50s life insurance products that over-50s would consider arranging, by age, September 2020
- Renters and mortgage holders the most likely to consider a policy
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- Figure 41: Over-50s life insurance products that over-50s would consider arranging, by housing tenure, September 2020
Main Reason for Arranging an Over-50s Life Insurance Policy
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- Covering funeral costs is the main motivation for taking out an over-50s policy
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- Figure 42: Main reason for having arranged or considering arranging an over-50s life insurance policy, September 2020
- Managing expectations to improve perceptions of industry
Over-50s Life Insurance Purchase and Ownership Behaviour
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- Most over-50s plan owners are confident they have the right level of cover
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- Figure 43: Agreement with statements about the purchase and ownership of over-50s life ownership, September 2020
- Prior relationship more important deciding factor than a welcome gift
Most Trusted Sources of Product Information and Advertising
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- Consumers trust independent sources of information the most
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- Figure 44: Most trusted sources of over-50s life insurance product information, September 2020
- Nearly half interested in over-50s cover trust consumer websites
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- Figure 45: Most trusted sources of over-50s life insurance product information, by those who would consider an over-50s life insurance policy or prepaid funeral plan, September 2020
- Consumer websites are the most trusted regardless of age
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- Figure 46: Top five most trusted sources of over-50s life insurance product information, by age, September 2020
Most Important Features of Over-50s Life Insurance
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- Consumers desire flexibility around payouts and premium payments
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- Figure 47: Most important features and benefits of an over-50s life insurance policy, September 2020
- Flexibility a priority for those who would consider buying a policy
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- Figure 48: Most important features and benefits of an over-50s life insurance policy, by life insurance product ownership, September 2020
- A fifth of existing over-50s policyholders say welcome gifts are important
- The youngest of the target market show most interest in flexibility
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- Figure 49: Most important features and benefits of an over-50s life insurance policy, by age, September 2020
Attitudes towards Life Insurance and Personal Finances
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- One in five say COVID-19 has prompted them to consider life cover
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- Figure 50: Agreement with statements about life insurance and personal finance, September 2020
- Half of under-65s are worried about having enough money for retirement
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- Figure 51: Agreement with statements about life insurance and personal finance, by gender and age, September 2020
- Most find it difficult to relate to ads aimed at over-50s
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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