Jeff PrestridgeApr 1 2021

Financial protection cover has stood up to the tough test of coronavirus

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Let's be honest, it has been a grim old winter.

Little to cheer us up apart from the successful rollout of coronavirus vaccines and some cracking drama on television (wasn’t ITV crime thriller Unforgotten damned good?).

For the record, I had my first vaccination a few weeks ago at the Madejski Stadium, home of Reading Football Club.

Also, for the record, it is the best experience I have ever had at this ground since it was built more than 20 years ago.

According to Cancer Research UK, some 3m people have missed out on cancer screening as a result of coronavirus

Over the years, I have either watched in pain as my beloved West Bromwich Albion FC has succumbed to yet another defeat at the hands of The Royals, or I have neared collapse in the stadium at the end of yet another gruelling Reading half marathon.

In comparison, the jab was a joy, although it did leave my left arm feeling rather dead for a few days afterwards.

Alas, enough of the cold, the grim and the jab. Spring is now in full swing, and with the clocks thrown forward it feels as if the country is on the cusp of an exciting reawakening.

Workers are emerging from the cocoons of their homes, marvelling at the magnolia blossom and beginning to return to their places of employment.

Trains are running half rather than near-empty. And it will not be long before all shops reopen and we are allowed to waddle off for a ludicrously expensive staycation in the Lakes or somewhere on the coast.

I am hoping to take a week off once Easter is out of the way and spend a day or so in Brighton swimming in the sea, however cold it is. Escape from lockdown.

Hopefully a return to near normality, aided in no small part by the government’s effective vaccination programme, will be long-lasting this time around.

It is imperative the economy moves into recovery mode as soon as possible.

It is also essential that the splendid NHS is allowed to refocus its resources on dealing with those health matters that understandably have taken a back stage over the past year. Detecting cancer early is a case in point.

According to Cancer Research UK, some 3m people have missed out on cancer screening as a result of coronavirus – including nearly a million women who have not been tested for breast cancer as they would have been in more normal times.

The charity believes some 8,600 women are now living with undetected breast cancer as a result. All rather worrying.

The latest financial protection insurance claims data from some of the country’s biggest providers confirms what Cancer Research UK has said. Fewer people being screened for cancer is resulting in a reduction in diagnoses – and a resulting fall off in claims.  

Zurich’s data for 2020 indicate that claims on its critical illness policies fell last year by nearly 15 per cent to £64.7m. It attributed the decline to fewer people accessing medical advice as a result of not wanting to be a burden on the NHS, fear of contracting coronavirus by visiting a hospital, and appointments not being available.

"A worry," was the verdict of Peter Hamilton on the drop in claims – he is head of market engagement at Zurich. "Finding and addressing medical problems early can reduce long-term impacts."

Similarly, Aegon recorded a 14 per cent reduction in the number of critical illness claims received last year – a drop that Simon Jacobs, underwriting and claims director at Aegon, said was related to fewer routine screenings being carried out for ‘mammograms and bowel investigations, which normally lead to a number of our cancer claims’. Jacobs says it is possible that claims could spike in the coming months as screening numbers get back to normal.

Analysing the claims data from these two companies confirms a number of things in my mind. First, and most importantly, quality financial protection insurance is worth its weight in gold and should be part of the financial armoury that financial advisers routinely display before clients.

It is a financial comfort blanket that most households should possess. Most, sadly, do not own it.

Second, unlike other insurances, financial protection cover has stood up to the tough test of coronavirus remarkably well, with Zurich paying out £15m in life insurance claims directly related to the illness – while 14 per cent of Aegon’s life insurance claims were ‘respiratory-related’.  As Mr Jacobs said: "Nothing could have demonstrated the importance of protection more than the events of last year."

Finally, it is time for people like me (a cynical journalist) to discard their long-standing view that financial protection insurers decline more claims than they accept.  

Last year, Aegon paid 93 per cent of critical illness claims and 95 per cent of income protection claims. The respective figures for Zurich were 87 and 85 per cent. These are percentages that confirm the insurance is worth buying.

Wearing my cynical cap for a moment, let us hope these high uphold rates are maintained if the future claims spike Jacobs talks about materialises.

Enjoy the dismantling of lockdown.

Jeff Prestridge is personal finance editor of The Mail on Sunday