Legal & General paid out £606m in individual protection claims in 2016 – an increase of £64m on the previous year.
The insurance provider paid 98.6 per cent of claims for life cover, 95.9 per cent for terminal illness and 92.56 per cent for critical illness, taking the total payouts over the past five years to £2.6bn.
Life cover payouts were up £39.5m on 2015, while critical illness payouts rose by £14m and terminal illness payouts by £13m on the previous year.
L&G also paid out a total of £1.8m for children’s critical illness in 2016, representing 94.2 per cent of claims, along with £1.2m in income protection, representing 94.4 per cent of claims.
Mark Holweger, managing director of Legal & General Insurance (Partnerships), said: “Our figures show that protection continues to play a vital role in supporting thousands of people in their time of need every year, giving them added peace of mind about their finances when they need it most.
“Yet still the UK continues to suffer from a protection gap which leaves many people’s lifestyles at risk should they sadly be diagnosed with a critical illness or unable to work due to long term illness.
“We hope that advisers are able to make positive use of these statistics to further address this gap and show consumers how important protection can be during an extremely challenging time in their lives.”
Ben Smaje, managing director at London-based Kennedy Wealth Management, said: “Claims figures are used quite a lot with clients because there is still come scepticism around insurance payouts.
“It is not always the best stories that get in the press, so the more insurers can do, the better. These numbers look quite good to me.”
simon.allin@ft.com
