Critical illness claims surpass life claims
Friends Life’s payouts for critical illness claims are higher than life claims for the first time, which is a sign that advisers are providing clients with all options, Chris Pollard has said.
The head of underwriting, claims and customer services for Friends Life highlighted latest statistics from the provider, which revealed it paid £122m in CI claims in 2014 – £1m more than for life claims.
Friends Life also paid more than £265m overall in individual protection claims to more than 7,000 people, the equivalent of £1m every working day.
Mr Pollard said: “CI cover offers a financial safety net, meaning people can concentrate on getting better and not have to worry about paying the bills.”
Cancer remained the largest cause of a claim but there was an increase in the number of heart attack, stroke and multiple sclerosis claims paid out. More than £600,000 was also paid to customers under Friends Life’s diabetes cover.
| Friends Life claim statistics for 2014: |
- 94% of adult critical illness claims paid (up from 91% in 2013) worth £122m, plus £1.7m paid to 88 families in child claims. - 99% of life claims and terminal illness claims paid worth £121m. - 86% of income protection claims paid (up from 85% in 2013) worth £20m. - £550,000 paid for fracture claims. |
Meanwhile, the most common reasons for rejecting a claim in 2014, according to Universal Provident, was the amount falling within the policy excess and for outpatient treatment/consultations on a policy that only covered in and day-patient treatment – at 15.8 per cent of all claims rejected.
According to its annual claims-declined statistics, Universal Provident said the third most common reason for declining a claim concerned hazardous pursuits and dentistry, at 10.5 per cent of all claims rejected.
The most popular source of claims paid but declined in part involved, as in previous years, chronic conditions.
Adviser View
Robert Harvey, protection specialist at Brighton-based Drewberry Insurance, said: “Figures suggest that more people are suffering from those ailments and that insurers are catching up in terms of their definition of critical illness and broadening out and adding more illnesses. Insurers are paying out in more cases and for more CI claims as they do not necessarily result in death. Figures show life expectancy is higher.
“If more people are having to rely on CI cover and insurers are paying out more, people should think about being insured for broader issues, such as income protection alongside CI. While CI insurance is certainly very good and improving, it still has limitations.”
