GlobalData findings reveal that as many as one in ten UK consumers are prompted to purchase life insurance due to having children, meaning the rising number of child-free households should be a real concern for the industry. Insurers will need to invest time and effort into their strategies to tackle the potential loss of business.

Term assurance accounts for the largest share of the protection market. It is also the protection product relying the most on individuals having children for its sale. According to GlobalData’s 2023 UK Insurance Consumer Survey, 10.5% of term assurance policyholders bought their policy either because they had their first child or a new addition to the family. While buying a new house (17.7%) remains the main trigger, having children is still an important reason for purchase—and one that cannot be ignored by the industry.

A significant challenge to the industry is that there are increasingly fewer households with children, and hence fewer will see value in purchasing protection products. Research released by L&G in June 2024 found that the number of UK child-free households was on the rise and now totalled 4.1 million. Surprisingly, 67% and 87% of child-free households with a double income and with a single income respectively did not have a life insurance policy in place, highlighting the magnitude of the problem. The UK’s infamously high nursery costs, coupled with the cost of raising children as a whole, are deterring many from having children. Meanwhile, societal pressure to have children is decreasing. The current cost-of-living crisis will be another contributing factor for many families to decide to give parenthood a miss. Life insurance as well as other protection products, such as income protection and critical illness insurance, are all more relevant to households with multiple people relying on an income. This means that insurers will need to find a way to convince child-free households to take out protection products. With no childcare costs, such households are better off financially on average, but they will also likely be more disengaged with financial products as they may see less of a need for them. Insurers will need to highlight the benefits of holding protection products amid the UK’s changing household structures.

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