Impending changes to inheritance tax and growing awareness of the need for cover are the key drivers behind an increase in premium value and rising sales across the protection product range in the first quarter of the year.
Yesterday, Health & Protection reported on Gen Re’s Protection Pulse Q1 2026 update which revealed that protection new business sales in the first quarter of the year remained broadly in line with the corresponding period of 2025, but premium levels had grown by 6.8%.
Policy sales declined by 242, however £219m in premiums were written in Q1 2026 on an annual premium equivalent (APE) basis, up from £205m in Q1 2025.
This premium growth was recorded in all protection product segments for the first time since 2023.
Advisers told Health & Protection that changes to inheritance tax (IHT) and growing awareness about the need for protection were key factors in this shift.
In 2024, the newly elected Labour government announced that pensions and pension death-in-service benefits would be included within estates for IHT from April 2027, which will mean more estates will fall into the taxable bracket for IHT, unless action is taken.
In May, Swiss Re’s Jennifer Gilchrist noted that the whole of life market has seen “lots of activity” with individuals increasing sums assured by 50% or more in response to IHT changes.
Rising number of enquiries
Alan Knowles, co-managing director at Cura Financial Services, told Health & Protection his firm has definitely seen an increase in enquiries related to this.
“We’d gone from getting the odd enquiry, so one a month that was IHT related, to getting maybe three or four enquiries per day,” Knowles said.
“It’s a substantial increase where they are asking us to help their clients with this sort of thing.”
Tara Cohen, director, mortgage and protection consultant at The Mortgage Centre Direct, has also noted an increase in enquiries.
“It can be mostly to do with making sure there are sums left to pay off the tax bill,” she said.
“But from clients we have dealt with who aren’t in the equity release space, it’s just they’ve got a regular mortgage and perhaps they’re a single parent and in the event of the death, there isn’t another parent there to pick up the slack.
“They’re arranging a whole of life policy so there is a lump sum left for the kids to stay in the home until they have left full time education.
“Those are the two uses we see.”
Protection Distributors Group board member Roy McLoughlin was even more unequivocal.
“Undoubtedly part of this will be the increase in the appetite for whole of life advice alongside the proposed IHT changes in April 2027,” McLoughlin told Health & Protection.
“And that accounts for the bigger sum assured as well.
“You’d like to think that part of it is Consumer Duty as well.
“Maybe more mortgage and wealth advisers in the spirit of Consumer Duty write more protection.
“It’s encouraging to see advisers are taking into account the proposed IHT changes where we are an integral part of the solution.”
Greater awareness
But reflecting on the growth across the protection product range, Emma Astley, owner of Cover My Bubble, attributed this to greater awareness of protection, with social media playing a significant role.
“Advisers are becoming much better at educating consumers through relatable, real-life content, helping people understand that protection is about far more than just life insurance.” Astley added.
“We’re seeing more conversations around children’s cover, income protection and the added-value benefits that many policies include, such as mental health support and virtual GPs.
“As consumers better understand the value of these products, they’re choosing more comprehensive protection solutions rather than focusing solely on the lowest monthly premium.”
No decrease
And while the Gen Re data pointed to a slight dip in policies sold, this is not something Karla Edwards, owner of the Protection Parent, has seen.
“I haven’t seen a decrease,” Edwards told Health & Protection. “Ours have stayed steady, if not increased across everything.
“We’ve maintained growth, but the policy numbers if anything have gone up.
“I don’t know if that’s because of where we’re located, but the policy numbers have increased.
“Our clients are from all over the UK, but I’d say 60-70% are North East based.”