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Protection industry paid out £3.1bn in 2013

The UK individual protection industry paid out an average of £8.4m every day across life, critical illness and income protection claims in 2013, figures show.

Data published by the Association of British Insurers reveals a total payout of £3.1bn in the year, to some 99,000 families.

The average term life insurance claim was £51,500, with 98.4 per cent of all life claims paid out totaling £1.3bn.

Whole life claims averaged £10,300 with a 99.9 per cent payout rate. A total of £449m was paid in whole life claims across the industry in 2013.

A total of 12,004 IP claims were paid in the year, some 91 per cent of all IP claims made. The average pay out was £11,500 per claim, paying out for 230 weeks.

The total IP payout in 2013 was £138m.

The largest average payouts were for total permanent disability, with average claims of £66,700. Some 62 per cent of claims were paid for TPD in 2013, with a total payout of £28m in the year.

ABI head of protection Helen White says: “Industry initiatives such as the ABI’s code of practice on non-disclosure have led to a fall in the percentage of claims declined from 8 per cent in 2007, as customers have become much more aware of which information they need to share with their insurer.

“It is encouraging to see this has resulted in a continuing fall in the percentage of claims that are declined; insurer are committed to helping consumers make informed decisions about which protection insurance product is right for them and how to avoid having them declined.” 

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  1. It’s a pity the general public don’t know more about this aspect of our profession.

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