L&G’s non-disclosure drive reports record CI payouts
Legal & General paid out a record number of death and critical illness claims in 2011, which was partly due to a drive to reduce non-disclosure, Russell Whitworth has said.
The underwriting and claims director for L&G said the company paid out £441m death and critical illness claims in 2011, compared to £373m in 2012.
The proportion of death claims that were denied remained unchanged at 2.2 per cent, while 6.8 per cent of critical illness claims were denied, compared to 8.2 per cent the year before and 16.7 per cent in 2006.
He said: “Legal & General is in the business of paying claims. Our focus is to help people when they are at their most vulnerable and I am proud of these figures. We want to make sure we pay as many claims as possible as quickly as possible and give our customers the best service at what is a difficult time.”
The proportion of critical illness claims denied for non-disclosure fell to 2.6 per cent last year, compared to 2.8 per cent in 2010 and 12.1 per cent in 2006.
The number of CI claims that were denied for not meeting policy definitions fell to 4.2 per cent in 2011, from 5.4 per cent the year before and 4.6 per cent in 2006.
Mr Whitworth said: “We work hard to reduce non disclosure and less than 3 per cent of claims in 2011 were repudiated purely for medical non-disclosure and less than 5 per cent were for claims not meeting the definition as set out by the Association of British Insurers best practice for critical illness which L&G adheres to. These figures highlight the importance of critical illness cover for everyone.”
The average age of a CI claimant was 43 and £63,573 was paid for each critical illness claim, with cancer listed as the top reason for a claim.
Mr Whitworth added: “More than one in three people will contract some form of cancer during their lifetime.”
Danny Hopwood, financial consultant for London-based Bragagnini Associates, said: “I do a lot of protection considering I am a mortgage adviser. It is maybe 60 per cent of my business and by biggest income earner.
“I am increasingly finding that clients are finding these market comparison websites confusing and need good advice and need policies placed in the correct way.”
Phil Perry, director of Manchester-based IFA Ark Financial Planning, said: “Protection is the basis of any amount of financial planning. If you don’t have protection to cover your income, family and mortgage, there is no point to saving and investing. It’s all about maintaining your standard of living and thinking about the future.”