Confusion around underwriting and pricing is discouraging UK consumers from taking out life insurance according to new research commissioned by UnderwriteMe.
The study of 2,000 adults found more than half (51%) would feel frustrated if an initial quote increased after providing additional personal information, with nearly a quarter (24%) describing this as “very frustrating”.
While two thirds (66%) of respondents recognised that factors such as medical history, occupation and lifestyle influence premiums, almost a quarter (24%) said they were unsure how these elements affect pricing, and 10% did not believe they had any impact at all.
Cost remains the dominant barrier, with 32% of adults concerned life insurance will be too expensive. However, behavioural and trust-related barriers are also significant, with 21% unsure whether insurers would pay out and 14% describing the process as too complex or overwhelming.
GENDER DISPARITIES
More than half of women (55%) said they would be frustrated by post-underwriting price increases, compared with 47% of men, while women were also more likely to cite cost as a barrier (34% versus 30%).
Generational differences also highlight the advice challenge. Younger consumers are more likely to struggle with the starting point of the journey, with 20% of those aged 18–34 saying they do not know where to begin. Meanwhile, Gen Z respondents were the most likely to describe the process as confusing (23%), while concerns about insurer pay-outs were highest among Gen X (27%).
As real-time underwriting tools begin to reshape the customer journey the research points to a clear opportunity for advisers to improve engagement through clearer communication on pricing mechanics, underwriting expectations and application timelines.
LACK OF CLARITY
Nilesh Patel, chief revenue and customer officer at UnderwriteMe, said: “Most people understand why life insurance matters, but lack of clarity around how the process works is putting people off, leaving them lacking vital protection from a product that should be essential.
“Cost worries play a big part here but uncertainty about what will influence the final price can be just as significant. When quotes change or the purpose behind certain questions is not fully understood, it can create doubt. For some people that doubt is enough to delay a decision, even if they recognise the value of having that protection in place.
CONFIDENCE GAP
And he added: “There is also still a clear confidence gap around underwriting. If the process feels unfamiliar or unpredictable, people can assume it will be more complicated than it is. Technology is now enabling real-time underwriting so this is a solution that can help deliver results quickly and help advisers with getting applications over the line without delays.”
Roy McLoughlin of the Protection Distributors Group (PDG) said that adviser-side challenges remain.
“PDG’s recent Protection Insights Report highlighted that despite adviser optimism around protection, there is room for improvement across the market.
“The lack of adviser confidence in underwriting was also a key issue, with nearly six in 10 (59%) respondents saying inefficient underwriting was a key barrier to writing more protection.
“There is clearly frustration amongst advisers about unnecessary underwriting delays, additionally ratings and premiums can be difficult to explain to the customer six months down the line once the underwriting is completed. This can in turn cause consumer confusion around the process and pricing.”
WORK TOGETHER
And he added: “If the fear is consumers are abandoning the journey due to confusion around the process or pricing it is incumbent that the advisory community, in collaboration with insurers, work together to make the taking out of protection a far smoother process than it currently is.
“Underwriting needs to be slick, speedy, and easy to navigate which will certainly help adviser confidence and consumer confidence and uptake of protection policies.”
