Protection insurers paid claims to more than 129,100 customers or families, paying out an average of nearly £28,000 to customers who made a claim across life insurance, critical illness insurance and income protection.
Overall, 97.2% of protection claims were paid. When claims are declined this is usually due to either the claim being for a condition not covered by the policy, or the customer not disclosing important information when taking out the policy.
The average individual income protection policy pay out lasted for 214 weeks and was worth £40,000. In 2015, 91.2% of claims were paid out.
The average pay-out in 2015 on a critical illness insurance policy was £66,200. The percentage of CI insurance claims being paid continues to rise, with 93.1% paid (up from 80% in 2005).
The average pay-out on a term life insurance policy was £53,800 with 98.2% of claims being paid. In 2015, insurers paid out more than £1.5 billion in claims.
For whole life insurance the average claim payment was £5,900 with almost all (99.99%) of claims paid.
Yvonne Braun, ABI Director of Policy, Long-term Savings and Protection, said:
“Insurance can help to relieve the financial strain on families following a death, serious illness or injury. Every single day, insurers pay out nearly £10m to support families through difficult times. Insurers want to make it as simple and easy as possible for people to claim, and it’s great to see that 97% of these claims are paid.
“Protection insurance does not just help relieve financial distress, it also provides vital practical support. For instance, income protection supports people with rehabilitation services and back to work support when they have to leave work because of illness or injury.
“Serious illness or injury can have a massive impact on people, financially as well as personally. Products such as income protection, life insurance and critical illness cover improve people’s financial resilience, safeguard their financial future and provide peace of mind.”
