When you have taken out a personal protection policy, like term life insurance, critical illness cover or income protection, it’s likely that you are doing so because you have loved ones to protect. 

Because of this, it’s especially important that you have faith that the insurance will pay out if you need to make a claim. Of course, we would hope that you’d never need to make a claim  on these policies, but it’s good to know that the plan has your back, just in case!

In this article, we’ll be taking a look at three of our best selling insurance plans to see how they compare when it comes to claims. 

Please note that these figures are from participating insurers in 2021. 

 

Life insurance


When we talk about term life insurance, this applies to a life insurance plan that has a start and an end date. That means if you were to pass away during this time, your loved ones would receive a cash pay-out.

Of course, this does mean that there is a chance that you could outlive the policy - which is why it’s one of the most cost-effective options on the market!

Please note - There are policies available where you could be covered for the rest of your life, but they tend to be more expensive due to the guaranteed pay-out. Please visit our whole life insurance page to learn more.

Term life insurance is usually set up to cover your family during a time where they would be most vulnerable without you – i.e., there’s debt left on your mortgage, or you have dependents who will need financial support.

Because of this, we’d hope that you would never need to claim on the policy, but there are unfortunate instances where that may be the case.

Here are some statistics about life insurance claims:

  • Aviva, Scottish Widows and Zurich had the highest percentage of claims paid at 99%
     

  • The 1% that were declined were largely due to non-disclosure of key medical information during application
     

  • Aviva paid out a whopping £731.6m in life insurance claims
     

  • Scottish Widows recorded that their youngest claimant was 24 years old and the average age of a claimant was 58.7 years old. 
     

  • Aviva reported that the most common reasons for claims were Cancer (36.6%), Cardiovascular (19.5%) and COVID-19 (11.8%)

Please note these statistics are based on figures from 2021
 

Term life insurance is available to purchase online, with guidance or with advice. Please see our how to apply page to find out which route is best for you.

Need to speak to an expert insurance adviser?

Critical Illness Cover


Similar to term life insurance, critical illness cover is a product with a start and end date. With this policy, if you were diagnosed as being critically ill (within the definitions of your policy’s Ts & Cs) you would receive a cash payout.

Common uses for this kind of pay-out include home remodels if you now need your home to be more accessible, medical bills or even time off work so that you can focus on what really matters, getting better.

Here are some statistics about critical illness claims:

  • Aegon, Legal & General, LV= and Scottish Widows had the highest percentage of claims paid at 93%
     

  • The 7% declined were usually down to non-disclosure, or because the illness diagnosed did not meet the definition stated in the insurer’s terms and conditions
     

  • Legal & General paid out a massive £209.4m in Critical Illness claims
     

  • LV=’s youngest claimant was 24 years old, whilst their average age of claimants is 49 years old
     

  • Aegon reported that their top 3 claims were for Cancer (61%), Heart attack (13%) and Strokes (8%)
     

  • Of the £34.5m claims for Critical Illness Cover that Aegon paid out, 2% was for Children’s Critical Illness cover. 
     

Please note these statistics are based on figures from 2021

 

Talk to a Critical Illness expert today...

Income Protection


Income protection is designed to provide you with a monthly, tax free benefit in the event of you becoming incapacitated and unable to work due to illness or injury.

For example -  if you were off work for 1 year, and your sick pay entitlement was only for 6 months, then you could claim on your income protection policy to receive a monthly benefit for the remaining 6 months. This is of course, if you meet the criteria set by your policy.

Here are some statistics about income protection claims:

  • Zurich had the highest amount of claims paid at 99%, followed by LV= and The Exeter at 93% then Aegon at 90%
     

  • According to Aegon, all denied claims were a result of non-disclosure at application
     

  • Zurich paid out a huge £5.7m in income protection claims
     

  • The Exeter confirmed that their top claims were for Musculoskeletal (38.4%), COVID-19 (20.9%), Hip/Knee (9%) and Mental Health (7.1%) 

Please note these statistics are based on figures from 2021

Products & Services from the leading financial brands

  • Zurich
  • Legal And General
  • Aviva
  • AIG
  • Beagle Street
  • LVE
  • Royal London
  • Vitality Life
  • Virgin Money
  • Budget Insurance
  • Scottish Widows

What can I do to help guarantee a claim?

As you can see from the statistics above, the reason most claims were denied in 2021 came down to non-disclosure at application. 

When you are applying for term life insurance, critical illness cover or income protection, you will be required to go through medical underwriting. Underwriting is a process where you are asked questions about your health, lifestyle and family history. 

During this process, it is vitally important that you are as open and honest as you possibly can be. This ensures that the plan is set up correctly from the outset and makes it more likely for you to ensure your claim is successful.

If you are unsure what you should be mentioning on your application form, or if you are concerned that one of your medical conditions may have an impact on your policy, please speak to one of our expert advisers.

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