Private medical insurance (PMI) and cash plans have seen a surge in uptake over the last year while life and income protection (IP) cover have dropped in demand, according to research.
The number of people who have used private healthcare has also increased significantly in the last year but cancelling of insurance policies rose as well.
Encouragingly however, the proportion of UK workers that do not hold an insurance policy dropped dramatically between 2022 and 2023 from 48% to 25%.
The figures came from a survey of 2,000 employees conducted by The Exeter in June and illustrate the extent to which more people are turning to private treatment.
It found that 29% of respondents had or were applying for PMI compared to 18% last year, while 13% held or were applying for a cash plan, up from 8% in 2022.
In contrast, protection insurance was seen as less important with a fall in those either holding or applying for life cover to 23% from 31% a year earlier, and with IP down to 13% from 17%.
However, the insurer told Health & Protection it was seeing more promising figures.
Jamie Page, head of protection distribution at The Exeter, said: “Demand for The Exeter’s income protection and life insurance products are on track to deliver positive growth this year.
“As we head toward the end of 2023, we hope that the number of products sold within the industry will be comparative to 2022, and that the positive momentum we are seeing around income protection delivers sustained growth.”
Private treatment up as patients become impatient
Notably, the report found the use of private healthcare has increased, with nearly two-thirds (64%) of workers using some form of private care over the last year, up from 53%.
This trend continued across different age groups with younger people most likely to have gone private, with 81% of 18 to 24-year-olds having done so.
One of the biggest driving factors appeared to be lengthening NHS waiting lists and delays to treatment.
On average, over half of those surveyed were not prepared to wait for more than three months (54%) with one in five (18%) not prepared to wait more than 30 days.
Cancellations rising
The proportion of respondents who had cancelled a policy in the last year almost doubled from 4% to 7%.
But 43% of those who cancelled a policy did so because they did not see what value they got from it, did not know what it was for, or had never claimed.
Despite almost half (48%) of participants being aware of the additional policy benefits that can be accessed without making a claim, only a quarter (26%) had used them.
Younger people and men were more likely to be aware of and use those benefits, gaining the most from their policy and thus the best customer outcome, The Exeter said.
It added: “Our hope is that this perceived lack of value will be a less prominent theme in the future, in part because the Consumer Duty has introduced more stringent requirements for providers to ensure consumers understand these products.”
Majority concerned with food and bills
The insurer’s Health & Financial Fears report also investigated respondents’ wider concerns about the state of their lives and the economy, producing some stark results.
It found that 58% of workers were concerned about being able to afford basic food and utility bills – up from 52% in 2022 as the ongoing impact of the cost of living crisis affects the UK.
This was illustrated by 75% saying they were most worried about the continued rise in the cost of living, although this was down slightly from 79% last year.
Two thirds (65%) again said they were worried about not saving enough, while more than half (52%) were concerned about paying their rent or mortgage, up from 44%.
The proportion concerned about the loss of earnings due to illness also rose to 47% from 43%, although this was the lowest ranked of those issues listed.
Isobel Langton, CEO of The Exeter, (pictured) said: “The health and financial fears of UK workers have continued over the past 12 months, with our latest research showing how widely the cost of living crisis is being felt.
“People are more worried than last year about paying bills, meeting rental or mortgage payments, a loss of employment, the availability of NHS services, and the list goes on.
“None of us can predict when the uncertainty we are currently experiencing will pass, but we must not forget the role that we play in helping to protect the health and financial wellbeing of UK households.
“While we should be mindful of the challenges people are currently facing, it’s important that we continue to talk about insurance, the options available and its role in providing more people with support and peace of mind during difficult times.
“We hope our research helps inform wider conversations around protection, health insurance, and the added benefits included so that we can protect more people.”