Association of British Insurers: Record Amount Paid Out to Help Families Cope With Bereavement, Ill Health, and Injury
Latest figures out today from the
Earlier this year, the ABI published figures highlighting the
These latest figures also show a rise in mental health claims under individual income protection - up from 10% to 12% in 2020. This further highlights the impact of the pandemic on the mental health of the
However, there was a 6% fall in the number of critical illness claims paid last year, with their value down by 7% on 2019. This may in part be due to some illnesses going undiagnosed during the period of unprecedented pressure on medical services during the pandemic.
The pandemic dramatically highlighted the crucial role of the financial safety nets and support services provided by insurers. This support includes lump sum payments to provide financial support following a bereavement or diagnosis of serious illness and monthly payments to replace lost income following ill health or injury. Insurers also offer rehabilitation services to help customers return to work after an illness and they provide a wide range of extra services to support their customers' health, such as enhanced online medial consultations.
During the pandemic, insurers supported the
Highlights from the data
* The equivalent of
* The average payout on term life insurance policies (individual and group) was
* 98% of all claims were paid, virtually unchanged from 2019.
*
* Musculoskeletal illnesses were the most common claim under individual income protection.
* Non-disclosure was the biggest reason for declining individual income protection claims.
"The financial risks from ill-health are not new, but the pandemic has dramatically highlighted how the financial resilience of families can be so easily tested. There has never been a more important time to demonstrate the benefits of protection, the safety nets it can provide to customers and their families in difficult times, and its relevance for employers and financial advisers."
"The record payout to help families cope with death, illness and injury shows how insurers give vital financial support to their customers during what are difficult and stressful times. The pandemic reinforced just how valuable the protection provided by insurers has been. The high number of claims paid should give people confidence they can trust that their insurance provider will be there when they need them.
"However, non-disclosure of relevant medical information, and the condition not being covered were the two main reasons for the 2% of claims that were declined. This emphasises the need for customers and advisers to disclose all relevant health information when applying for cover, and for insurers to continue to improve the clarity and understanding of what is and what is not covered".
Full data breakdown
See table here: https://www.abi.org.uk/news/news-articles/2021/05/record-amount-paid-out-to-help-families-cope-with-bereavement-ill-health-and-injury/
*Includes figures from the
**Figures are for new claims, as well as income protection claims in payment
Products explained
* Critical Illness: A policy that pays out a lump sum, or ongoing payments, when the policyholder is diagnosed with a specified illness. Cancer is the most common cause of claim.
*
* Total Permanent Disability: This benefit pays a lump sum, or lifelong payments to the policyholder if they become permanently disabled.
* Whole of life Insurance: A product that covers the policyholder until the day they die. It allows the policyholder to build a small pot of savings to use to cover funeral costs, or to leave a small inheritance to family members.
* Income Protection: A policy designed to help fill income gaps when a person is unable to work due to illness or injury. It will usually cover a percentage of the policyholder's salary and will often provide support services to help employees back into work.
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