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The number of critical illness claims paid by the insurer rose by 5 per cent from 81 per cent in 2006 to 86 per cent in 2007.

The number of income protection claims remained the same with 86 per cent of these paid both in 2006 and 2007.

LV= revealed more than £54.9m was paid out to policyholders in protection claims last year. This included £5.8m in critical illness claims and £15.2m in income protection claims.

Chris McFarlane, head of protection for LV=, said: "We are pleased we have seen an improvement in our claims record. We have put a lot of work into developing ways to help financial advisers and their clients with policy applications and claims, so that valid claims are paid promptly and the risk of non-disclosure is significantly reduced."

LV= claims figures showed the top three causes of income protection claims were mental disorders, accounting for 30 per cent of claims, musculoskeletal disorders, accounting for 20 per cent and circulatory disorders that accounted for 11 per cent.

Cancer claims accounted for more than two-thirds of all critical illness claims.

Kevin Carr, head of protection strategy for London-based protection adviser Lifesearch, said: "We applaud LV= for publishing their claims statistics and believe this kind of move is crucial for the development of clarity and transparency in the industry.

"LV= is directly helping consumers to realise the value of protection, which is particularly important in the current economic climate, and also helping to improve consumer trust, all of which is good for consumers, financial advisers and product providers."

For more information about critical illness and LV= see the protection supplement with this week's Mortgage Adviser.