Almost one in three (29%) people have a medical condition when they buy protection insurance, according to landmark consumer research from the Financial Conduct Authority (FCA).
This often resulted in these people feeling they had to compromise on the type or level of protection cover they bought.
The FCA also found that almost one in three pure protection holders had a vulnerability with this rising among recent purchasers.
The FCA study is based on a nationally representative survey of 14,326 UK consumers between September and October 2025 and is a key element of the regulator’s review of the distribution of pure protection products.
Of those buying critical illness cover (CIC) 25% said they had to compromise, similar to the 24% buying income protection (IP), 28% who purchased term life insurance and 18% who bought an over-50s plan.
Critical illness cover
The main reasons CIC customers gave for feeling they had to compromise was that policy options did not cover everything they ideally wanted (36%).
They were declined for some types of cover (26%), their health limiting what they could get (26%), the process feeling confusing or overwhelming (24%) and they could not afford the cover they ideally wanted (23%).
The ways they compromised were by choosing a simpler or more basic type of cover (33%), removing features they initially wanted (32%) and by choosing a lower payout or benefit than they really wanted (28%).
Income protection cover
Among those buying IP, the main reason people with a pre-existing medical condition felt they needed to compromise was because they found the process confusing or overwhelming (38%).
This was followed by their health limiting what they could get (33%) and because the policy options did not cover everything they ideally wanted (27%),
More than one in three (37%) people compromised by accepting a policy they were not fully confident about.
This was followed by 31% who removed some of the features they initially wanted and 28% who chose a simpler or more basic type of cover.
Vulnerability
Compared to the wider sample of protection holders, those who bought a protection policy in the last 12 months were more likely to report characteristics of vulnerability, said the FCA.
At least 29% of pure protection holders have a vulnerability, the regultor found.
This had risen among those who bought a protection product in the last 12 months. Among pure protection policyholders:
- 22% had low resilience. This had risen to 29% among those who bought in the last 12 months.
- 11% had low capability. This had risen to 12% among those who bought in the last 12 months.
- 12% had poor health. This applied to 17% of people who bought in the last 12 months.
- 29% had a negative life event. This applied to 36% of people who bought in the last 12 months.
