ProtectionMay 24 2016

L&G pays 96% of all protection claims

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L&G pays 96% of all protection claims

Legal & General paid out £542m in individual protection claims, up by £22m on the 2014 figures, meaning it paid an average of £1.5m every day to customers last year.

The provider paid 96 per cent of claims for all protection products last year, including 97.9 per cent for life, 95.1 per cent for terminal illness and 91.5 per cent for critical illness.

This compares to last year’s figures, which had a 90 per cent pay rate for all protection products, including 98.3 per cent for life, 96.9 per cent for terminal illness, 93.9 per cent for income protection and 92.2 per cent for critical illness.

Over the last five years, this equates to £2.5bn paid out for life, critical and terminal illness claims, to more than 46,000 customers.

In terms of life claims, L&G helped 6,856 customers and their families with £277m in life claims in 2015. The largest claim paid was £1.2m and the average age of claimants was 63 years old.

For critical illness claims, 2,601 customers received a total of £167m.

Similar to 2014, the most common conditions for those receiving payments were cancer (62.3 per cent), heart attack (10.3 per cent) and stroke (5.9 per cent), with the average age of claimants being only 46-years-old.

The average critical illness claim paid was £65,585, with £838,000 being the largest claim.

Finally, for terminal illness, the total amount paid out last year was £94m.

Cancer was again by far the most common cause of illness, accounting for 99.5 per cent of all claims paid to 998 customers.

Steve Bryan, director, intermediary at Legal & General, said: “Our statistics show that thousands of our customers need our support every year, which reinforces the value and importance of life, critical and terminal illness cover, as these policies provide peace of mind to both individuals and families during these testing times.

“It is particularly sad to see a rise in the number of children’s critical illness claims last year, as this will be a truly heart-breaking time for parents. For this reason, we automatically include children’s cover in our critical illness policies for parents, so that we can support them throughout this difficult period.”

Adviser view

Sebastian van Mook, a financial adviser with Shropshire-based Abacus Associates, said: “I have used L&G. They are cheap and cheerful.

“Claim statistics are a consideration, more so for critical illness to be honest.”

peter.walker@ft.com