£8.4m daily insurance payout shatters ‘don’t pay’ myth: ABI

The head of protection at the Association of British Insurers said: “The insurance industry pays out £8.4m every day in individual life, critical illness and income protection insurance claims, making a real difference to people’s lives at some of the most difficult of times with 97 per cent of all claims paid in 2013.”

According to figures released by the Association of British Insurers, £3.1bn was paid out in protection claims to 99,000 people in 2013. Total permanent disability claims averaged £66,700, with 62.2 per cent paid, up from 50 per cent since 2009. Critical illness claims paid out 91.8 per cent of claims, a rise of 12 per cent since 2005, with an average pay-out of £60,400.

With 99.9 per cent of claims paid, the average payment for whole life insurance was £10,300 and for term life £51,500, with 98.4 per cent of claims being paid. The average claim paid in 2013 for individual income protection policies was £11,500, paying out on average for 230 weeks to help those unable to work.

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Expert view

Dougy Grant, protection director at Aegon UK, said: “The figures released by the ABI today shatter the illusion that insurance companies don’t pay claims and demonstrate how important it is to have cover in place. People should continue to be encouraged to think about their protection needs and whether they can afford to leave their families unprotected. A loss of income through being unable to work, falling ill or a death in the family takes not only an emotional toll, but a financial one too.”

Key facts

99.9 per cent - Life assurance claims paid

91.8 per cent - critical illness cover claims paid