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Targeting the Over-50s with Life Insurance

Targeting the Over-50s with Life Insurance

Summary

The UK’s over-50s population is growing, which means the customer segment is a growing opportunity for insurance providers. Those over 50 are often treated and targeted as one segment, but the market is highly diverse, and a “one size fits all” strategy should be avoided. Individual lifestyles differ due to a number of factors such as whether individuals are retired, whether they have dependent children living at home, their health, and their financial freedom. Acknowledging this should encourage a move away from targeting the singular “over 50s” segment towards focusing on the different life stages associated with growing older. This is important because differences in lifestyle mean the insurance needs of individuals also differ. Insurance providers must acknowledge and use this to develop their products and services to make them more relevant to consumers.

“Targeting the Over-50s with Life Insurance” explores the over-50s demographic and segments the age group into five distinct life stages. This spans those who have dependent children in education to those over 70 who are declining in health. The insurance needs and values of each life stage are highlighted and discussed, along with the opportunities each life stage provides insurers and how best to target them. The report discusses the main competitors within the over-50s segment and analyzes their approach to targeting customers.

Scope

  • Individuals with dependent children, partners, or parents require life insurance. 16.5% of over-50s have a child under 18, while 28.9% of parents over 50 have an adult child still living at home. Income protection and a policy linked to a mortgage are relevant for these individuals who are looking to financially protect their family. They may also look into long-term social care for dependent parents.
  • 57.0% of the over-50s UK population is economically inactive, which is driven by those aged over 65. Retired individuals are less dependent upon working for income and less likely to have a mortgage but will still have dependents in need of financial protection. These customers will be looking into retirement and investment planning, seeing how they can pass on their assets to their children.
Reasons to buy
  • Gain a better understanding of the diversity of customers within the over-50s segment.
  • Understand the differing values, behavior, and insurance needs of customers aged over 50.
  • Improve customer engagement by recognizing what is most important to over-50s customers based on their life stage and how insurers can adapt their products and services to meet their needs.
  • Understand how the over-50s segment should be approached with regards to marketing and advertising.
  • Discover the top providers within the over-50s market.


  • Executive Summary
    • Diversity within the over-50s needs to be acknowledged
    • Key findings
    • Critical success factors
  • The Over-50s Segment in the UK
    • Introduction
    • The UK's over-50s population is a growing opportunity
      • The over-50s form an increasing share of the UK adult population
      • The over-50s segment will continue to grow towards 2025
        • Table Figure 1: 47.6% of the UK adult population will be aged 50 or above by 2025
        • Table Projected proportion of the UK adult population by age (%) in 2005, 2015, and 2025f
      • Adults are living longer and are in better health
        • Table Figure 2: The UK population is living longer and is in better health
      • Over-50s make up two thirds of the disabled population in the UK
        • Table Figure 3: 35.6% of over-50s have a disability, with most being over the age of 80
      • The over-50s market is skewed towards women due to their longer life expectancy
        • Table Figure 4: The over-50s market, especially those over 70, is skewed towards women
      • Most over-50s are married, but there is a shift towards becoming widowed with age
        • Table Figure 5: There is a shift from being married to being widowed in line with age
      • One in five adults aged over 45 lives alone
        • Table Figure 6: 48.0% of females aged over 75 in the UK live alone
      • Over-50s may still have dependents as a result of having children later
        • Table Figure 7: Women are deciding to have children later in life
        • Table Figure 8: 6.6% of young adults aged 15–34 lived with their parents in 2015
      • The majority of over-50s have adult children aged over 19
        • Table Figure 9: 94.0% of adults over 50 have children, the majority of whom are aged over 19
        • Table Figure 10: The proportion of over-50s with children under 18 falls with age
      • Almost 70% of UK household wealth is held by over-50s
      • Most over-65s are economically inactive, whereas 50-64s are still in employment
        • Table Figure 11: There is a clear shift from employment to retirement after 65
      • Outright home ownership increases with age as mortgages are paid off over time
        • Table Figure 12: The majority of over-65s own their homes outright without a mortgage
    • Lifestyles
      • The diversity within the over-50s market needs to be acknowledged
      • The lifestyle of an individual is a combined outcome of three factors
        • Table Figure 13: Lifestages of the over-50s
      • Sizing lifestage segments within the over-50s population
        • Table Figure 14: The declining health segment accounts for over a third of the over-50s population
        • Table Number of individuals and proportion of the over-50s population, by lifestage
        • Table Figure 15: There is a clear correlation between lifestage and age band within the over-50s segment
        • Table Number of individuals and proportion of the over-50s population by age band, 2015
      • Societal changes mean the ages lifestages are associated with are shifting
  • Targeting Over-50s with Life Insurance
    • The key to successful targeting is to understand the customer
      • There are three elements that need to be aligned to target a consumer group
      • Individuals over-50 with dependent children still identify with the mass market
      • A subtle marketing approach is needed for individuals with adult children at home
      • Early retirees are more focused on retirement and inheritance planning
      • Late retirees begin to identify with being labeled as over-50s customers
      • Declining health should not dominate the identity of an individual
    • Marketing needs to move away from age towards lifestage
      • Individuals take out life insurance policies when there is a lifestyle trigger
      • Life insurers need to increase product penetration to gain customers
      • Providers need to develop more flexible products
      • Retirees are just as in need of life insurance as an individual with a family
      • The life insurance needs of customers change over time
      • Moving away from the over-50s label
      • Marketing strategies should represent older customers positively
      • Older customers should be a focus for advertising
      • Wearables and technology
  • A Range of Insurance Providers Target Over- 50s
    • Life is the most visible "over-50s" product in insurance
      • There are many approaches insurance providers take to target the over-50s market
      • Legal & General's over-50s life insurance policy is highly focused on end of life
        • Table Figure 16: Legal & General's over-50s policy focuses on end of life
      • Aviva keeps its over-50s life insurance product description customer neutral
      • Scottish Widows Protect allows customers to adapt their policy as their needs change
        • Table Figure 17: Scottish Widows' Protect For Life policy has three cover options
      • LV
        • Table Figure 18: LV= offers five life insurance policy types
        • Table Figure 19: In 2017, LV= has dedicated a TV marketing campaign to its 50 Plus Plan
      • Saga exclusively targets customers aged over 50 across its whole portfolio
      • The transition to over-50s products does not happen overnight
      • Aviva and Legal & General are the leading providers of whole of life policies
        • Table Figure 20: Aviva has a higher affinity among customers aged between 50 and 64
      • Legal & General and Aviva top the market for term assurance cover
        • Table Figure 21: Legal & General holds a 20.9% provider share for term assurance
      • Aviva and Legal & General are also the favored providers for income protection
        • Table Figure 22: One in five over-50s with an income protection policy are with Aviva
      • Conclusion
  • Appendix
    • Definitions
      • Banks/building societies
      • Brokers
      • Direct
    • Methodology
      • Primary and secondary research
      • GlobalData's 2016 UK General Insurance Consumer Survey
      • GlobalData's 2016 UK Life Insurance Consumer Survey
    • Bibliography
    • Further reading

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