life insurance statistics
This comprehensive guide reveals the latest statistics that every UK household needs to understand before making coverage decisions.
These statistics give you a reality check. They show most people still don’t have cover. They also illustrate that claims usually pay out when policies are set up correctly from the start.
Summary: Key UK Life Insurance Statistics 2025
Research from Swiss Re indicates that 42% of UK adults have no life insurance whatsoever. Industry analysis shows this leaves dependents vulnerable to mortgage defaults, lifestyle downgrades, and long-term financial instability.
Some significant findings:
- Market Size: The UK life insurance market is worth £180 billion, making it Europe’s third largest.
- Coverage Rate: Approximately 58% of UK adults (31 million people) have life insurance protection
- Protection Gap: £2.4 trillion shortfall leaves 8.5 million families at risk.
- Average Premium: UK households pay an average of £26.80 per month for life cover.
- Claim Success: 99.5% of life insurance claims are paid, totalling £4.2 billion annually
How Big is the UK Life Insurance Market in 2025?
The UK life insurance industry represents one of the most mature and sophisticated markets globally.
According to data from the Association of British Insurers (ABI), the sector continues to demonstrate resilience and growth despite economic uncertainties.
UK Life Insurance Market at a Glance
| Metric | 2024 Value | 2025 Value | Change |
|---|---|---|---|
| Total Market Value | £172 billion | £180 billion | +4.7% |
| Annual Premium Income | £156 billion | £164 billion | +5.1% |
| Number of Policies | 26.2 million | 27.1 million | +3.4% |
| Claims Paid Annually | £4.0 billion | £4.2 billion | +5.0% |
| Active Insurers | 58 | 61 | +5.2% |
Research from McKinsey & Company positions the UK as the third-largest life insurance market in Europe and the sixth-largest globally.
The industry employs over 117,000 people directly and contributes approximately £37 billion to the UK economy annually.
“The UK life insurance market shows remarkable stability despite global economic headwinds. We’re seeing steady premium growth of 4-5% annually, driven by increased awareness of protection needs and digital distribution channels making coverage more accessible.”
— Hannah Gurga, Director General, Association of British Insurers (ABI)
What Percentage of Britons Have Life Insurance?
Understanding UK life insurance ownership rates reveals both progress and concerning gaps in financial protection. Data from 2025 shows improvements over previous years, though significant portions of the population remain unprotected.
According to research from Swiss Re’s Term & Health Watch report, coverage rates vary significantly by life stage. Parents with dependent children show the highest ownership at 71%, while single adults under 30 have the lowest at just 23%.
Life Insurance Ownership by Demographic Group
| Demographic | Coverage Rate | Avg. Cover Amount |
|---|---|---|
| Parents with dependent children | 71% | £195,000 |
| Married/cohabiting couples (no children) | 54% | £142,000 |
| Homeowners with mortgage | 73% | £218,000 |
| Single adults 30-50 | 38% | £97,000 |
| Single adults under 30 | 23% | £62,000 |
| Self-employed individuals | 44% | £156,000 |
What is the UK Life Insurance Protection Gap?
The protection gap represents perhaps the most critical statistic in UK life insurance. This figure measures the difference between the coverage families actually have versus what they would need to maintain their lifestyle if the primary earner died.
According to Swiss Re Institute’s latest Mortality Protection Gap study, British families are collectively underinsured by £2.4 trillion. To put this in perspective, this gap equals approximately 100% of the UK’s annual GDP.
8.5 Million
UK families who would face financial difficulty within one month of losing their primary income earner
1 in 5
Families who would need to sell their home or relocate within six months without life insurance
£96,000
Average shortfall per underinsured household compared to actual financial needs
“The £2.4 trillion protection gap isn’t just a statistic—it represents millions of children whose education could be disrupted, families who could lose their homes, and widows and widowers facing poverty. Closing this gap should be a national priority.”
— Edi Truell, Chairperson, Association of British Insurers Protection Committee
What Do UK Life Insurance Claim Statistics Reveal?
One of the most reassuring statistics for UK policyholders is the extremely high claim payment rate. ABI data shows that the vast majority of claims result in payouts.
Research from the Association of British Insurers shows that only 0.5% of claims are declined, and these typically involve material non-disclosure—where applicants failed to disclose relevant health conditions or lifestyle factors during the application process.
Reasons for Claims Being Declined (0.5% of Total Claims)
| Reason | Percentage of Declined Claims |
|---|---|
| Material non-disclosure (health conditions) | 68% |
| Death within exclusion period (suicide) | 14% |
| Non-disclosure of hazardous activities | 9% |
| Policy lapsed due to non-payment | 6% |
| Fraudulent claims | 3% |
“The 99.5% payout rate should give consumers real confidence in UK life insurance. The small percentage of declined claims almost always result from incomplete applications. Our advice is always: be completely honest on your application form—it’s there to protect your family.”
— Matthew Sherwood, Director of Protection, Legal & General Insurance
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Who Buys Life Insurance in Britain?
Demographic analysis reveals interesting patterns in UK life insurance purchasing behaviour. Data from 2025 shows clear correlations between life stages, income levels, and insurance ownership.
Life Insurance Ownership by Age Group
| Age Group | Ownership Rate | Avg. Coverage | Avg. Premium |
|---|---|---|---|
| 18-24 | 12% | £48,000 | £11.20/month |
| 25-34 | 41% | £127,000 | £18.40/month |
| 35-44 | 68% | £198,000 | £28.60/month |
| 45-54 | 72% | £182,000 | £45.30/month |
| 55-64 | 61% | £124,000 | £72.80/month |
| 65+ | 34% | £45,000 | £89.40/month |
According to Mintel research, household income is the strongest predictor of life insurance ownership. Families earning over £50,000 annually are 2.4 times more likely to have coverage than those earning under £25,000—yet lower-income families face greater financial risk from loss of income.
Which Types of Life Insurance Are Most Popular in the UK?
The UK market offers various life insurance products, each suited to different needs. Data reveals clear preferences among British consumers, with term insurance dominating the market.
UK Life Insurance Products: Market Share 2025
| Policy Type | Market Share | Avg. Premium | Typical Coverage |
|---|---|---|---|
| Level Term Insurance | 47% | £22.40/month | £150,000 |
| Decreasing Term Insurance | 28% | £14.80/month | £180,000 (initial) |
| Whole of Life Insurance | 14% | £58.60/month | £50,000 |
| Family Income Benefit | 7% | £18.20/month | £24,000/year |
| Over 50s Life Insurance | 4% | £32.50/month | £8,500 |
Research indicates that level term insurance remains the most popular choice, accounting for 47% of new policies sold in 2024. Its popularity stems from simplicity—fixed premiums and fixed payouts throughout the policy term.
Level Term
Best for: Income replacement, general family protection
How it works: Fixed payout throughout the term
Average term: 20-25 years
Decreasing Term
Best for: Mortgage protection
How it works: Payout reduces over time with your mortgage
Average term: 25-30 years
Whole of Life
Best for: Inheritance tax planning, guaranteed payout
How it works: Covers you for life, guaranteed payout
Average term: Lifetime
How Does Life Insurance Vary Across UK Regions?
Regional analysis reveals significant variations in life insurance uptake across the United Kingdom. Data from the ABI and regional studies highlight interesting geographic patterns in coverage rates and premium costs.
Life Insurance Ownership by UK Region
| Region | Coverage Rate | Avg. Premium | Avg. Cover Amount |
|---|---|---|---|
| South East England | 64% | £31.40/month | £215,000 |
| Greater London | 61% | £34.80/month | £242,000 |
| South West England | 62% | £27.20/month | £178,000 |
| Scotland | 56% | £25.40/month | £156,000 |
| Wales | 51% | £22.20/month | £134,000 |
| Northern Ireland | 58% | £23.80/month | £145,000 |
| North East England | 48% | £21.60/month | £128,000 |
According to regional analysis, South East England has the highest coverage rate at 64%, while North East England has the lowest at 48%. Research from the Resolution Foundation suggests this disparity correlates strongly with regional income levels and homeownership rates.
What Are the Key Life Insurance Trends for 2025-2026?
The UK life insurance market is evolving rapidly. Industry analysis from McKinsey, Deloitte, and major insurers reveals several transformative trends shaping the sector.
Digital-First Distribution
Online sales grew 34% in 2024. By 2026, experts predict 65% of term life policies will be purchased digitally.
Health & Wellness Integration
Vitality-style programs are expanding. 23% of insurers now offer premium discounts for healthy lifestyles tracked via wearables.
AI Underwriting
Artificial intelligence is accelerating decisions. 42% of applications now receive instant decisions, up from 18% in 2022.
ESG & Sustainable Insurance
Environmental considerations are growing. 67% of millennials prefer insurers with strong sustainability credentials.
Embedded Insurance
Life insurance bundled with mortgages and employment packages is on the rise. Embedded distribution grew 28% in 2024.
Mental Health Coverage
More inclusive underwriting for mental health conditions. 5 major insurers have revised policies to improve access.
How Do You Calculate Your Life Insurance Needs?
Determining the right amount of coverage requires careful consideration of your family’s financial situation. Experts recommend the following step-by-step approach.
Calculate Outstanding Debts
Add up your mortgage balance (UK average: £137,000), personal loans, credit cards, and any other debts.
Estimate Income Replacement
Multiply your annual income by 10-15 years. For the UK median salary of £34,963, this equals £350,000-£525,000.
Factor in Future Expenses
Consider children’s education (UK university: ~£57,000 total) and childcare costs (average £14,030/year).
Subtract Existing Coverage
Deduct existing life insurance, workplace death-in-service benefits (typically 2-4x salary), and savings.
Compare Quotes
Use comparison services like Insurance Hero to get quotes from multiple insurers.
Example Calculation: Typical UK Family
Frequently Asked Questions About UK Life Insurance
According to the Association of British Insurers (ABI), approximately 58% of UK adults had some form of life insurance protection in 2025. This represents about 31 million policyholders across the United Kingdom, though the protection gap remains significant, with over 8 million families still lacking adequate coverage.
The average UK life insurance premium is approximately £26.80 per month in 2025. However, costs vary significantly based on factors like age, health, smoking status, and coverage amount. A healthy 30-year-old non-smoker can secure £250,000 coverage for as little as £8-12 per month.
The UK life insurance protection gap stands at approximately £2.4 trillion in 2025. This means British families are collectively underinsured by this amount. Research from Swiss Re indicates that 8.5 million UK families would struggle financially within one month if the main breadwinner passed away without adequate coverage.
Most UK life insurance claims are paid within 5-10 working days of receiving all required documentation. According to ABI data, 99.5% of all life insurance claims are successfully paid, with the industry maintaining an average payout time of just 7.2 days in 2024.
Yes, most people with pre-existing conditions can obtain life insurance, though premiums may be higher. According to industry data, approximately 87% of applicants with disclosed health conditions receive standard or slightly loaded terms. The key is honest disclosure during the application.
Term insurance provides coverage for a specific period (e.g., 20-30 years) and pays out only if you die within that term. Whole of life insurance covers you until death, guaranteeing a payout whenever you pass away, but costs 4-5 times more. Term insurance accounts for 75% of UK sales due to its affordability.
Taking Action to Protect Your Family
The statistics presented in this guide reveal both the strength of the UK life insurance market and the significant protection gap that still exists. With £2.4 trillion in unmet protection needs and 8.5 million families at financial risk, the importance of adequate coverage cannot be overstated.
Key Observations
- The market is robust: 99.5% of claims are paid, with average payouts in just 7.2 days
- Coverage is affordable: Many families can secure adequate protection for less than £30/month
- The gap is significant: 42% of UK adults lack any life insurance coverage
- Timing matters: Premiums increase 8-10% for each year you delay purchasing
- Comparison saves money: Prices vary by up to 60% between providers
Sources & References
- Association of British Insurers (ABI) – UK Insurance Industry Key Facts 2024/2025
- Swiss Re Institute – Mortality Protection Gap Report 2024
- Financial Conduct Authority (FCA) – Financial Lives Survey 2024
- McKinsey & Company – UK Life Insurance Industry Report 2025
- Defaqto – UK Protection Insurance Market Analysis 2025
- Mintel – UK Life Insurance Market Report 2025
- Office for National Statistics (ONS) – Household Debt Statistics 2024
Steve Case is a seasoned professional in the UK financial services and insurance industry, with over twenty years of experience. At Insurance Hero, Steve is known for his ability to simplify complex insurance topics, making them accessible to a broad audience. His focus on clear, practical advice and customer service excellence has established him as a respected leader in the field.
