One in four consumers have taken on debt to fund their private medical insurance (PMI) cover.
This is according to findings from insurance finance specialist Premium Credit which found tighter household budgets had led to more consumers borrowing money to pay for their insurance premiums.
Indeed, consumers borrowed on average £505 to pay their premiums, up from £400 last year and £302 in 2024.
A third of those with a life insurance policy borrowed money to pay for it, down from 34% last year.
For those holding PMI, 23% took on debt to fund their cover, up from 20% in 2025. The level of those using someone else’s money to fund their critical illness policy fell to 12% from 14%.
Cost of living to blame
Car insurance and home insurance were the products most commonly financed through borrowing, both at 56% of policyholders, followed by life insurance.
Overall, more than three-quarters (76%) of those surveyed who had insurance policies were using debt to pay for one or more of their plans, the same level as last year.
Around half (53%) of borrowers blamed the rising cost of living for doing so, double the 26% who pointed to insurance premium increases.
Last year 43% highlighted the cost of living while 24% faced higher premium quotes.
Around half (51%) borrowed more than they did last year to pay their premiums, up from 43% in 2025, while 39% did not borrow as much as last year.
Credit cards were the most popular form of borrowing by consumers with more than half (55%) using them, up from 41% last year.
Almost a quarter (23%) took on more debt as paying their premiums monthly was better for managing their budget.
Mona Patel, consumer spokesperson at Premium Credit, said: “It is notable that substantial numbers who are borrowing more are doing so because paying for insurance monthly is more convenient and better for their general budgeting in line with how they pay for other products and services.
“Spreading the cost of an annual policy into more convenient monthly payments works for many millions of UK consumers and businesses and it can be a good alternative to other forms of credit like credit cards or bank overdrafts,” she added.
Around a third of consumers (32%) expected their financial situation to worsen in the next 12 months, the research found, almost double the 19% who expected it to improve.
Almost four in 10 people (38%) did not expect it to change.