Over 50 Insurance Report By Mintel

Over 50 Insurance Whole of Life Insurance 2012.

Over 50 insurance formed part of the report by Mintel covering the Whole of Life insurance market in the UK.  Folk who have explored this site will be aware that we are not keen on the type of insurance badged as Over 50s Insurance: why would anyone want a plan which typically has:

  1. No cash value if you can no longer afford premiums.
  2. Pays out a fixed amount which will fall further and further behind with normal and funeral inflation.  Some offer inflation options, but from what we have seem they can be very expensive.
Over 50’s Insurance exploits a loophole in the Financial Services Authorities pathetic regulation of the financial services and typifies there extremely odd approach to destroying innovation and ignoring rather important issues such as Payment Protection Insurance for over 20 years.  Most of the Over 50’s policies sold are a type of whole life policy which Financial Services Authority allow to be sold unregulated.  This has allowed the fantasy to build up that a non-profit whole of life policy is appropriate for funeral planning when they are clearly not.   More appropriate types of whole life policy are available, though their effectiveness has been massively damaged by Regulatory interference.

This is Mintels introduction to their report.

“Despite economic uncertainty the whole of life market has performed relatively well, helped in part by the growing popularity of guaranteed acceptance plans for the over 50s. During 2011, the number of new policy sales increased by around 19%. The value of new business also increased during the same period, albeit at a slower rate of 8.6% – as competition among insurers and usage of price comparison sites has increased.

The ageing UK population means that providers have an expanding target market, while the desire to protect and leave an inheritance for family remains strong among consumers. Funeral planning will become increasingly important in the future, as price inflation could leave bereaved families exposed following a loved one’s death. As a result, demand for guaranteed acceptance plans should increase as customers take steps to plan their financial future, rather than ignoring the taboo subject of death.

However, there are several challenges facing the industry. Regulatory changes could have a big impact on insurers’ profit margins and future premiums prices. The ECJ gender ruling will push up prices for female clients and could have an impact on product uptake among this demographic. In addition, the RDR may have an effect on distribution and access to advice, although, this will have a less pronounced effect in the over-50s market.

This report examines the whole of life market with particular focus on the guaranteed acceptance plan sector. It provides a detailed analysis of the over-50s life insurance market and some of the main issues currently facing product providers. There is a full breakdown of market size in terms of volume and value, with a forecast showing the expected growth in the next five years. Recent innovations and distribution trends are also analysed. The final sections of this report examine the over-50s consumer, looking at product ownership, purchase triggers and general financial planning for the future.”

Over 50 Insurance.