The Swiss Re Term and Health Watch 2026 report found that there were 1.7% more protection policies sold in the UK in 2025, around two million, pointing to a steadier market.
However, consumers are placing more importance on value, prioritisation and the structure of policies over time.
Jennifer Gilchrist, senior industry affairs manager at Swiss Re, said: “The market is not contracting, but rebalancing.
“Customers are taking a more considered approach to spending, working with advisers to align protection with their needs and budgets.”
There was an 11.9% rise in the number of income protection policies sold last year, coming to 266,994, while standalone critical illness policies sales rose 2.1% to 137,263.
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Charlie Dellar, principal analytics consultant at iPipeline, said: “Protection demand is evolving rather than retreating.
“2025 saw continued growth in multi-benefit policies, with income protection an increasingly popular benefit. Whilst advisers are focused on increased efficiency, it may be that consumer sentiment has also driven this demand – a sense of financial vulnerability driven by cost of living and economic pressures.”
Swiss Re’s report also showed a shift in estate planning, as joint-life second death term assurance was assessed alongside whole of life for the first time, adding around 7,600 policies and nearly 30% to the inheritance tax (IHT) protection market.
It found that joint-life first death policies were falling in favour of single-life policies, with the number dropping from 79,166 in 2023 to 72,008 in 2024, then totalling 49,944 at the end of last year. Swiss Re said this reflected the focus on flexibility, consumer outcomes and industry campaigns around the value of single-life cover.
In percentage terms, this was a fall of 30.6% in one year and 36.9% over two years.
Swiss Re said there was also an emergence of simpler products, which broadened consumers’ access to policies, alongside advice.
It said the market was adapting rather than shrinking, with flexibility and advice converting the need for protection into “sustainable demand”.
