Young adults are most likely to cancel a life insurance policy but are also the group most likely to take out such cover following a big life event.
Encouragingly, Vitality’s survey of 2,000 UK adults in November found the overwhelming majority of UK adults (87%) who had life insurance had not considered cancelling.
However, of the 13% of people who had considered cancelling, 18-34-year-olds were the most likely to do soat just over a quarter (27%), followed by 10% of 35-54-year-olds and 9% of over-55s.
Only 9% of people had cancelled their policies over the last year, but this same group of young people made up 16% of that group.
This compared to 9% of 35-54-year-olds and 6% of people over-55s.
While young people were most likely to cancel an existing policy, the survey found 62% of 18-34-year-olds were between 18 and 24 when they first took out their policy, and 38% were aged between 25-34.
Vitality said the findings suggest protection was a valued product for this age group, with external influences like job loss (17%) and inflationary increases (16%) being the main drivers for them to cancel a policy.
Young people were found to be the most likely group to reinstate their policy with 78% saying they would for any reason, and 35% if their finances improved.
In contrast only 14% of older people would reinstate a policy if their finances improved.
Additionally, they were also the most likely group to purchase a policy for big life event like having a child (34%), buying a property (24%), or getting married (19%).
Justin Taurog, managing director at VitalityLife, (pictured) said: “Traditionally we tend to think of the younger generation being much less likely or more reluctant to buy life insurance, so these results showing a shift in this behaviour and attitudes are really encouraging.
“However, given we also see that young people are more likely to cancel their life insurance, the challenge for the industry is clear.
“Demonstrating ongoing value is undoubtably part of the solution here. Our own data really brings this point to life, with those who engage most with the Vitality Programme over a third less likely to cancel their insurance compared to those who don’t.”
