According to Swiss Re’s Term & Health Watch report, this is up from 10% growth in the prior year.
Nearly half of new policies sold in 2024 had a limited payment term (LPT), with the report noting that new two-year LPT policies rose by 1.3% in 2024.
Normal retirement age (NRA) profiles jumped by 36.6% last year, Swiss Re said.
Looking at term and critical illness, total new term assurance sales fell by 0.8%, equal to around 11,577 policies.
However, decreasing term assurance grew by 3.6% during the period and term assurance-only new policies were flat during the period.
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Regarding whole life, Swiss Re said the market is “yet to recover from the substantial drop recorded in 2022”.
The report noted that new guaranteed acceptance whole life purchases reduced by 1.5%, and sales of underwritten whole life policies without a critical illness benefit decreased by 8.2% after several years of growth.
Protection market showing ‘pockets of positivity’
Reflecting on the results, Joanna Scott, technical manager and industry affairs manager for L&H UKI at Swiss Re, said 2024 was “another busy year in the UK, both politically and economically”.
She explained: “In a continued high-interest-rate environment, with cost pressures mounting for households, it’s encouraging to see so many pockets of positivity – not least in the realm of income protection and decreasing term sales. This was in no small part down to improvements in the mortgage market.
“Looking ahead, a defining feature of the second half of 2025 will be maturing mortgages from the Covid-19 pandemic house buyers’ cohort. With the holders of cheaper fixed rate mortgages facing an increase in repayments of 200bps-250bps, it will be interesting to see what impact this has on protection take-up.”
Scott noted that the government was on a “clear mission to keep people in work as part of its plans to boost productivity”.
“The Keep Britain Working review, led by Sir Charlie Mayfield, has shone a real light on the role of employers and what they can do. But it has also highlighted the role of income protection insurance in supporting people both financially and medically while minimising government spending.
“Sales of NRA and LPT products are now split 51:49. This is hugely positive when considering the potential impact on the welfare state if an employee is unable to return to work before the end of a policy’s payment period. But there is still a long way to go,” she added.
Scott noted that the steep increase in standalone critical illness sales implies that sales “slowly becoming less tied to the sale of mortgages as the main distribution channel”.
“It could also be indicative of a trend towards people taking out smaller add-on cover as part of a menu plan,” she noted.
Paul Yates, product strategy director at iPipeline, which co-produced the report, said: “Advisers are increasingly realising greater value from the protection market as they refine their sales and recommendation processes to better meet their clients’ holistic protection needs. Our latest data highlights improved efficiency, with stronger quote-to-policy conversion and a growing preference for multi-benefit plans – increasing product density per client. Multi-benefit plans now represent over a third of all protection sales.
“We’re also seeing a clear shift toward quality over cost, with advisers placing less emphasis on just the lowest priced options. The continued growth in APE (£) relative to new policy volumes underscores this trend. It’s a compelling sign that advisers are delivering more comprehensive protection solutions for their clients.”
