With providers starting to release their claims statistics for last year, it is reassuring to see that they make for good reading. So far, life claims paid are coming out above 98 per cent and critical illness claims around 93 per cent. Aegon and Cirencester have also published income protection claims paid in excess of 94 per cent of cases.
So it would seem the question of whether insurers really do pay claims can be answered with a resounding yes.
In fact, Aviva paid a record £900m to customers holding individual protection last year. This breaks down to a staggering £2.5m paid out every day in either life, critical illness or income protection claims. That is 25,000 families helped by just Aviva at an incredibly stressful time.
Legal & General quote some incredible numbers, too: £636m paid out in total across the year to 13,000 customers. It also states it has paid out £2.7bn in life, critical illness and terminal illness claims over the past five years.
Whether dealing with bereavement, an inability to work, or coming to terms with a serious illness, the removal of the worry about how bills are going to be paid will have made a huge difference to each of these customers.
They will also have had access to the support services that the majority of providers now offer. Be it a second opinion service, access to counselling or medical help lines, these additional support services are another massive benefit.
But what makes these numbers even more astounding is the fact that, despite this many claims being paid, so many people in the UK remain unprotected.
How many more families will face coming to terms with the loss of a loved one or a debilitating illness without the financial support and protection they are likely to need?
These figures demonstrate just how many people are benefiting from having cover, yet so often the protection conversation, particularly alongside mortgage advice, is still seen as an up-sell, not as a duty of care. And this is not just by consumers, but also by some advisers.
The amount paid out in claims should reassure us that we are doing the right thing when we talk about the importance of protection. It is our responsibility to ensure that as many of our clients as possible are protected, so they too have the peace of mind that they will have the means to remain in their home and pay their bills should their ability to earn be affected.
I am sure other providers’ claim statistics will make for similar reading and it would be good if more could be done to publicise these. It should reassure those who may be cynical about insurance that it really does pay, that there is a clear need, and that it is far from being an up-sell.
Lucy Brown is head of protection at London & Country