Demand for income protection continued to accelerate during 2025 as advisers and consumers increasingly prioritised flexible and targeted protection solutions amid ongoing economic uncertainty.

New research from Swiss Re’s Term & Health Watch 2026 found income protection sales rose by 11.9% last year, significantly outperforming the wider protection market as financial resilience became a growing focus for consumers.

The report suggests the UK protection market is not shrinking but “rebalancing”, with customers becoming more selective about how they structure protection cover and increasingly relying on adviser guidance to balance affordability and long-term protection needs.

Overall, around 2 million new protection policies were sold during 2025, representing a modest annual decline of 1.8%.

BIG SHIFTS

However, Swiss Re said the headline figures mask significant shifts beneath the surface of the market.

Term assurance sales fell by 2.9%, while standalone critical illness business rose slightly by 2.1%.

At the same time, the estate planning protection market expanded sharply, with Swiss Re reporting almost 30% growth following the increasing use of second-death term assurance products alongside traditional whole-of-life cover.

The report also highlighted a major shift away from joint-life policies.

Sales of level term joint-life first-death policies fell by more than 30% year-on-year and almost 37% over two years as advisers increasingly favour single-life structures offering greater flexibility and improved customer outcomes.

Swiss Re said the wider market is increasingly evolving towards simpler, more flexible products capable of supporting affordability and long-term customer engagement.

REBALANCING ACT

Jennifer Gilchrist, senior industry affairs manager at Swiss Re, said: “The market is not contracting, but rebalancing.

“Customers are taking a more considered approach to spending, working with advisers to align protection with their needs and budgets.”

Charlie Dellar, principal analytics consultant at iPipeline, said income protection was increasingly moving to the centre of protection planning conversations.

He said: “2025 saw continued growth in multi-benefit policies with income protection an increasingly popular benefit.

“Whilst advisers are focused on increased efficiency, it may be that consumer sentiment has also driven this demand — a sense of financial vulnerability driven by cost of living and economic pressures.”

Swiss Re said the findings demonstrate how flexibility, advice and simpler product design are helping convert long-term protection need into more sustainable demand across the market.