Households could be leaving themselves vulnerable by cutting their financial protection due to the cost of living crisis, according to Zurich.
A survey of 191 financial advisers found around half of customers had become more price sensitive when considering life (48 per cent) or critical illness cover (49 per cent).
Around a quarter (23 per cent) of customers were now reluctant to commit to taking out new life insurance policies.
Meanwhile 37 per cent are now more reluctant to take out a critical illness policy, and 34 per cent more reluctant to take out new income protection policies.
This comes as domestic bills remain high, with high energy and mortgage costs causing some households to struggle to make ends meet.
The survey revealed most advisers (59 per cent) felt critical illness in particular would become increasingly difficult to sell with clients becoming more price sensitive and/or reluctant to commit to new policies.
Around 39 per cent expected income protection to become more difficult to sell.
Louise Colley, head of retail protection at Zurich, said: “Protection insurance is one of the last things that a family or individual can afford to lose during a cost of living crisis.
“If a customer really can’t afford to keep up with payments, changing their cover is better than cancelling it outright, but advisers should be mindful of why their clients took the cover out in the first place, and remember that leaving them underinsured carries its own risks.”
Nearly all advisers said the cost of living crisis featured in their conversations with clients, with 65 per cent looking for ways to reduce their outgoings.
Some 61 per cent voiced concerns over their mortgage rates, and 24 per cent were looking to switch to lower cost insurance cover.
Two thirds of advisers told Zurich that they have now adapted their approach to client conversations to focus more on the importance of protection.
Colley said: “The real value of protection is shown when times are toughest, and while household finances remain squeezed, there can be no more valuable time for that peace of mind than now.”
sonia.rach@ft.com
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