Payouts for bereavement, illness, and injury claims top £18.6 million a day

A record £6.8 billion was paid out in individual and group life insurance, income protection and critical illness claims in 2021, according to the latest figures from the Association of British Insurers (ABI). This equated to £18.6 million a day, £1.6 million a day more than 2020’s previous record.

The bumper increase in individual protection claims occurred despite a 1.6% drop in the total number of new claims paid. This is due to more individual term assurance and critical illness claims, which have much higher values. The average claim payment for term assurance was £61,944 and £67,500 for critical illness, which is consistent with 2020.

This is the third year in a row that the average individual payout has increased, and the average value for a claim is up 9% on 2020, to £14,994.

Covid-19 payouts almost double

Payouts for Covid-19 related individual claims almost doubled in 2021, to £261 million, despite the number of claims paid remaining almost identical to 2020.

This was due to a 69% increase in term assurance claims, where the average payment was £69,760.

98% of claims accepted

Continuing the trend of the last three years, 98% of both individual and group claims were paid in 2021. The main reason behind an individual protection claim being rejected was ‘non-disclosure’. This is when a customer doesn’t tell their insurer something at the outset that might have affected the insurer’s decision to provide cover and the price of that cover.

Talk to Asset Harbour today about making sure you have enough cover in place  01276 986333