Sales of new individual income protection policies rose 16% year-on-year to hit 247,000 in 2023, according to new figures from insurance and investment provider trade body the ABI.

Almost all (97%) of individual income protection products were sold with advice.

Sales of standalone critical illness policies totalled 75,700 in 2023, almost four times higher than 10 years ago and a record high.

Yvonne Braun, director of policy, long term savings, health and protection at the ABI, said: “Financial resilience – the ability to withstand a financial shock – is a hugely important issue.

"It’s encouraging to see that so many people recognise that income protection and critical illness insurance are an important part of Financial Planning and play a crucial role in providing a financial safety net.” 

However, sales of mortgage-related term assurance fell as activity in the UK housing market slowed.

Sales of term assurance products were at the lowest levels since 2017 with 1.5m policies sold last year.

Non-mortgage related term assurance sales fell 8% in 2023 following stronger sales over the previous four years. Mortgage-related term sales fell 10% year-on-year with 449,000 policies sold. 

Overall sales of individual contracts (including term assurance, critical illness, income protection, whole of life, relevant life plans and business protection) in 2023 fell to the lowest volumes seen since 2018. Some 2.1m individual contracts were sold in 2023 compared to 2.2m in 2022.