Insurers pay out £1.9bn on life and CI claims

30 August 2011 3:45 pm | By Natalie Holt

Insurers paid out a total of £1.9bn for life insurance and critical-illness claims for 2010, data from the Association of British Insurers reveals.

More than 40,000 families and individuals received a claim payment last year, with £47,166 the average amount paid out.

The total amount paid out on life policies was £1.14bn, while the total for CI was £776m.

Some 29,182 term life claims were paid during 2010, 98.2 per cent of all term life claims. A further 534 term life claims were declined.

For CI, 11,161 claims were paid last year, amounting to 89.9 per cent of all claims. 1,248 claims were declined.

The total amount paid to customers relating to CI policies has fallen slightly from 2009, which the ABI attributes to customers cancelling their policies due to budget constraints.

The ABI introduced guidance on insurance claims in 2008 to ensure customers who made a genuine mistake through non-disclosure were not disadvantaged. The guidance emerged after the level of rejected claims hit 16 per cent in 2007.

Since the guidance was introduced, figures from the Financial Ombudsman Service show that the number of long-term protection complaints has reduced by 50 per cent.

ABI director of life and savings Maggie Craig (pictured) says: “CI and life insurance policies are crucial in helping people during some of the most difficult times in their lives.

“The industry continues to work closely with its members to ensure that all claims are handled as quickly and as sensitively as possible.”

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