Individual income protection (IP) has seen significant growth in sales post-pandemic and demand remains generally strong, particularly among younger age groups.
In some areas IP is now outstripping critical illness uptake but there are some anecdotal signs this may be slowing with advisers noting some populations are effectively excluded.
Insurers are updating products to help address needs for the changing population and their life demands, particularly with concerns around affordability driving innovations such as limited benefit terms, adjustments to underwriting and simplifying product lines.
With vast swathes of the population lacking cover, education and awareness raising are vital, but the industry is aware improving and simplifying communication are required.
Sustained growth
According to Health & Protection’s 2024 individual and business protection report, income protection was the most positive market and that trend continued in 2024.
Mike Farrell, protection sales and marketing director at LV=, reveals the insurer has seen sustained growth in individual IP sales over the past several years, reflecting a wider market trend.
“Advisers who regularly discuss IP with clients are increasingly confident in tailoring it to individual needs, creating more opportunities and driving higher sales,” Farrell says.
“A buoyant housing market in 2025 has helped to support this growth, with mortgage conversations offering a natural point for advisers to introduce protection.“
IP sales outstripping CI
Reflecting this growth, Andy Walton, proposition director – protection at Mortgage Advice Bureau (MAB), revealed the network has seen income protection sales grow by 300% compared to critical illness at 80% for the same period.
“We now write more income protection than critical illness,” Walton tells Health & Protection.
“We saw a boost post-Covid in income protection sales, as there was increased consciousness around being off work sick and the importance of a stable income,” Walton adds.
“This growth has continued to accelerate, and we expect income protection to continue to grow at a faster pace than critical illness.”
Decade of growth
But this sales growth is not limited to the post-pandemic world.
In fact David Hollingworth, associate director, communications at London & Country Mortgages, explains demand for IP has grown substantially over the past decade.
“Going back to 2010 income protection accounted for a low single digit percentage of policies whereas now it’s close to a third,” Hollingworth continues.
“Covid showed the importance of the product
“Covid and furlough brought the concept of income protection to life for many people, showing how vulnerable we are if unable to work and generate an income.”
Long term sickness
Shedding light on what is driving this growth in demand, Kristian Breeze, director at Ascend Life, points to two key macro forces.
“First, long-term sickness has become a structural issue,” Breeze tells Health & Protection.
Office for National Statistics data shows 2.83 million working-age people were economically inactive due to long-term illness in early 2024.
“Second, NHS waiting lists remain stubbornly high at 7.46 million pathways despite record treatment volumes, keeping the risk of prolonged absence front of mind,” he continues.
Strongest demand among under 35s
While these underlying trends may lead one to conclude the most uptake would be from older age groups more at risk from falling out of work due to ill health, but younger age groups are also showing interest.
James Shattock, managing director of UK protection at L&G, tells Health & Protection the strongest demand stems from adults aged 25 and 34.
“This age group is also typically more financially exposed to income disruption,” Shattock says.
“Almost all (98%) sales are advised, with many IFAs increasingly recommending income protection over critical illness, reflecting a shift in consumer needs.
“Insurers are responding to rising demand by evolving product strategies and expanding market reach.
“This includes developing tailored strategies for underserved segments such as renters and self-employed,” Shattock adds.
Has uptake flatlined
However, older populations remain important and the sector cannot afford to be complacent the growth will continue.
Kesh Thukaram, co-founder of Best Insurance, points out while demand for IP remains robust, there are signs it has flatlined or is at least not growing as in the past years.
“The demand is primarily driven by customers’ fear of losing their lifestyle – especially the self-employed section of the economy, if they are unable to work for a period of time due to an illness or sickness,” Thukaram explains.
“The general trend continues to be customers in their early 40s to late 50s.
“There is an increasing requirement from people over 60 years of age, who sadly are being declined as insurers do not issue policies to people older than 60 years, even if they are perfectly healthy.”
Customer expectations
It is clear that product offerings must evolve in line with customer expectations as Justin Taurog, CEO at VitalityLife, explains.
“In recent years, what income protection offers, and what people expect from it, has changed significantly,” Taurog tells Health & Protection.
“Product enhancements like shorter deferred periods, extended retirement ages, and broader own occupation definitions have made cover more relevant and accessible, which we’ve seen reflected in more people taking out policies”
More cost effective products
The sector has to contend with the perception that cover is costly, but providers are responding.
“Demand is being driven by a need for short-term protection options and more cost-effective, accessible products,” Sally Waterfield, chief marketing officer at National Friendly, tells Health & Protection.
“The strongest demand is still coming from the 30–45 age group, who are often at their peak of financial commitments.”
Cheaper accident and sickness-style plans with no underwriting are being introduced by some providers, while others are making more technical adjustments to enable coverage for more populations.
Tim Butler, propositions manager at Zurich, notes the insurer has seen a marked increase in demand for income protection this year.
“We’re also seeing a really broad range of customers accessing our product across different occupations and demographics – there is demand from all age groups within policy limits, but mostly for those aged under 40.”
Added value services now expected
One of the most notable product developments is the expansion and desire for added value services.
These have gone from a nice to have to a customer expectation, according to Scott Cadger, head of underwriting strategy and claims at Scottish Widows.
“This shift has led to increased demand for policies that offer more than just a monthly benefit,” Cadger continues.
“Value-added services such as virtual GP access, mental health support, and physiotherapy are now considered essential components of a modern IP offering.
“These features reflect both customer expectations and adviser feedback, positioning income protection as a holistic wellbeing product rather than a purely financial one.”
And Jo Miller, managing director at the IPTF, tells Health & Protection future product developments must be driven by customer needs.
“Product flexibility, affordability and accessibility will all help to drive demand moving forward.
“The indications from The Profile of an Income Protection Customer report are that demand will remain strong, particularly in younger age groups and we would expect multi benefit plans to continue to drive up penetration of IP.
“Adviser engagement with the market remains absolutely key.”
Low customer awareness
Though for advisers, even getting to a conversation about income protection is a challenge as low customer awareness about the product prevails.
Rebecca Lowe, proposition development manager, protection at Aviva, says: “One challenge we see in continuing the momentum in the income protection market is low customer awareness of the existence of the product and the value it provides.
“This creates a reliance on education by financial advisers in a heavily intermediated market and is more prevalent for income protection than life or critical illness,” Lowe continues.
“As insurers, providing the education and awareness tools that can support adviser conversations with clients to demonstrate the role income protection can play in supporting financial resilience is critical.
“Income protection is a clear area where an adviser can demonstrate real customer value through their advice.”
Simple, everyday language
In order to demonstrate that value and enable greater awareness and engagment, communication is vital.
For this, it is paramount the protection sector uses simple, everyday language in customer communications, says Alan Waddington, director of distribution at Cirencester Friendly.
“We are never going to reach everyone who needs protection if we continue to confuse the message through jargon,” he says.
“I have seen a lot of improvement on this, but there is still more to be done.”
But Waddington adds the sector also needs to talk about the everyday illnesses that can impact people’s ability to work.
“Income protection is not just about guarding against the impact of serious illnesses like cancer or heart disease,” Waddington adds.
“Simple things like accidents or back pain are what a significant number of our claims are for. These can happen to anyone.”
But Waddington calls on advisers to resist assuming they know what their customers look like.
“Advisers need to ask the question of everyone,” Waddington continues.
“If they speak to anyone who is working, they should know there is a product that can protect their income.”
Embedding protection
Justin Harper, chief marketing officer LifeSearch, maintains the industry needs to shift its mindset from selling products to embedding protection into everyday lives.
“This means cover that flexes for renters, gig workers, parents and those managing long-term health,” Harper says.
“Consumers want products that work for them and their lives rather than generic marketing aimed at the masses.
“The need to protect income and strengthen financial resilience to life shocks will keep building and customers are continuing to buy leaner cover.
“If insurers keep innovating, advisers keep humanising the story and we adopt bolder engagement into underserved segments, IP will grow steadily into 2026 and beyond.”
Shifting ‘it won’t happen to me’ mindset
For Joanna Streames, owner of Velvet Mortgage and Insure Services, a key consumer mindset needs to shift.
“I believe there’s still a mindset in the UK that ‘it won’t happen to me,’” Streames says.
“Despite the shocks of the pandemic, many people are reluctant to spend on protecting their income.
“I expected a bigger shift after Covid, but people have short memories. The reality is that illness and accidents haven’t gone away and if anything, pressures including financial ones have increased.”