Providers pay out more than £6bn in protection claims

Providers pay out more than £6bn in protection claims
Despite the challenges we all faced in 2020, protection providers have continued to provide a crucial financial safety net for thousands of people and their families, with the vast majority of claims paid.

Most providers have now reported their claims figures for 2020, with life insurance typically paying on average 97% of claims made and critical illness on average 92% of claims made. This shows that even when getting medical evidence is more difficult and office life is not perhaps as straightforward as normal, settling claims is still top of providers’ priority list.

The amounts paid out, perhaps less surprisingly, are also high, with Aviva paying out more £1bn for the first time ever last year, supporting 50,000 families through the most difficult of times . L&G meanwhile, reported pay-outs totalling £763m.

According to data from the Association of British Insurers and Group Risk Development, in total a record £6.2bn was paid out in life insurance, income protection and critical illness claims.

A significant volume of claims were sadly a direct result of coronavirus, but this year’s statistics will likely show that the pandemic has had other impacts, due to people staying away from hospitals and GP surgeries. This has meant fewer referrals, which in turn has resulted in delays in cancer diagnosis. If you are experiencing any symptoms which are causing you concern, please get them checked out as soon as possible, as early diagnosis means treatment is much more likely to be successful.

Are you protected?

With such vast numbers of people claiming on protection policies, it’s worth thinking about how many others are left struggling financially because they don’t have cover in place.

No protection policy can take away the pain of losing someone you love, or cure illnesses, but having cover can provide choices and options for those able to claim. It can also give valuable peace of mind that you won’t have to worry about making ends meet when you should be focusing on your recovery, or that your loved ones won’t be left struggling financially if you’re no longer around. If you don’t have cover in place, and want some advice as to your best options, L&C’s specialist protection advisers are ready to help.

Extra benefits

Protection policies don’t only provide you with a financial buffer if you make a claim - many offer a wide range of “living benefits” too. These services, which can include mental health support, physiotherapy and even routine GP appointments have proved invaluable for many people during the pandemic, especially with the NHS hugely overstretched. They have enabled policyholders to access services remotely, request private prescriptions and receive counselling over the phone or online.

Insurer LV saw a massive 496 % increase in the use of its remote psychological services last year, whilst The Exeter saw a 129% uplift in take up of mental health support through its Healthwise programme. LV’s remote GP services saw a 88% uplift in 2020, with The Exeter reporting a 112% year-on-year increase in the use of remote GPs. Demand for remote physiotherapy services has also grown significantly. LV and The Exeter said they had seen a 235% and 115% increase in remote physio respectively, reflecting just how useful customers find these benefits whether they make a claim or not.

Additional support services provide added value at the point of claim too. Scottish Widows, for example, reported 310 policyholder referrals to Macmillan Cancer Support and has seen a 60% increase in the use of Red Arc services (specialist nursing support) from 2019 to 2020. Usage of this service doubled between January and March 2021 compared to the same period last year.

If you’re considering buying a protection policy but aren’t sure where to start, get in touch with one of L&Cs protection advisers. They can explain how the different types of cover work, and advise which policy is right for you based on your individual circumstances.

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