Life Insurance Pay Out Statistics

One reason why some people may avoid enquiring about Life Insurance is that there is a negative opinion on life insurance pay out.

It’s a straight forward simple fact that having financial protection in place is a worthwhile investment. Life Insurance, Critical Illness Insurance and Income protection should be the bed rock of most peoples financial planning.

One of the main objections for not taking out the appropriate cover is: “it’s a waste of money as it won’t pay out” or “the insurers will do anything to get out of a claim.”

This simply is not the case and is proven by the Life Insurance claims statistics that have been published so far this year by some of the UK’s top Life Insurers.

As with most things, the public are often fed wrong information through the media in this country where only one side of the argument is told. It’s only the bad news that is often reported. The odd case when the insurers don’t pay out. In reality the overwhelming majority of claims are paid without any issues. When was the last time the media told the public the good news about the claim statistics?

The UK’s population is chronically under insured, income protection insurance should arguably be the first insurance anyone buys, but in reality less than 10% of the public have this. The only way for this to change is for the public to have confidence that the insurers will pay out when they are needed.

The claim statistics published so far this year;

LV=

LV paid out 93% of claims. Only 1% of Income protection and 3% of Critical Illness claims were not made due to non-disclosure. LV paid out £9M in Critical Illness claims and £12M in Income Protection claims so far in 2011.

The average age for an Income Protection claim is 44 and the average Critical Illness claim is 47. Mental disorders such as depression and stress were the most common income protection claims and Cancer was the most common Critical Illness claim.

LV’s average Income protection claim was for £14,389 and was paid over 7 years! This goes to show how important Income Protection can be as many people who are off work long term incapacitated are still not working 7 years later.

Zurich

Zurich paid out 89% of Critical Illness claims in the first half of 2011; this amounts to 787 successful claims so far this year. Only 1% of the claims were rejected for non-disclosure.

Scottish Provident

Scottish Provident paid out £47M in Critical Illness claims in the first 6 months of 2011. 91% of claims were successful. The largest Critical Illness claim was for £945K!

Bright Grey

Bright Grey paid out 96% of Life cover claims so far in 2011, this amounts to £9.5M, the average pay out being £82K.

90% of Critical illnesses claims were also paid out so far with this amounting to £8.7M with an average pay out of £78K. The most common age for a Critical Illness pay-out is in the 40 with Cancer the most common causes.

Conclusion

As you can see by the results so far, the overwhelming majority of claims are paid out successfully.

Hopefully if you feel that have avoided requesting a life insurance quote due to poor life insurance pay out statistics then this information will give you some confidence when you go to buy a life insurance protection product.