Paid life claims reached 99% and mental health most common reason for IP pay-out
Zurich has announced it paid 97% of all retail protection claims last year – a payments total of £235.2m to 2,872 customers and their families – which compared to 95% paid claims in 2016 (£224.6m).
A total of 867 critical illness claims were paid in 2017 (95%), at a cost of £65.2m to the insurer.
Cancer – the most common cause of critical illness pay-outs – alone accounted for 59% of CIC payments and amounted to £40m worth of claims.
Heart attack was the second most common reason for claims (14%), followed by stroke (6%) and multiple sclerosis (3%).
The average CIC claim last year was £75k and 54% were from men with the average claimant being 52 years of age compared to 49 years for women.
Families with children covered by policies received £647k in total from pay-outs.
The small number of declined claims were because a customer had not disclosed key medical information on their application such as lifestyle (smoking or drinking habits) or existing medical issues (3%) or because a condition claimed for was not covered for by the policy (2%).
The total percentage of life claims paid was 99% in 2017, to 1,929 customers (£144.6m).
The 1% of denied claims were due to non-disclosure of important medical information on application forms.
For IP, more than £8.8m was paid in claims and there were 76 made and 87% of these were paid.
Ten were claims not paid over the period, including seven where the policy’s criteria were not met, and where three customers returned to work before the policy’s payment period started.
Accounting for 22% of IP claims, mental health was the most common reason for a pay-out, followed by musculoskeletal conditions (18%), cancer (15%) and neurological illnesses (14%) such as multiple sclerosis.
“Research periodically suggests that customers aren’t necessarily confident that these kind of plans will pay out – these figures evidence that the overwhelming proportion of claims are successful” said Peter Hamilton, Zurich’s head of market management. “We know that the likelihood of claims being paid is a key factor in helping customers decide whether or not to buy life insurance including income protection and critical illness.”
According the Zurich’s internal research, a quarter of people do not have cover because they think it’s too expensive and nearly a third do not think it is relevant, he also pointed out.
“We hope that sharing this information helps to chip away at the commonly held view that insurers don’t pay out,” added Hamilton. “Having cover like this in place means people can maintain their standard of living without having to worry about covering large costs like mortgages while they’re trying to deal with serious illness.
“We’re also keen to highlight the extra support available to customers through their policies such as professional counselling, therapies and advice on everything from sourcing suitable elder care through to money management.”
Article : Covermagazine.co.uk – Adam Saville @AdSaville_COVER 13 April 2018