LV introduces early payment on death claims

LV introduces early payment on death claims

LV paid out 94 per cent of all new individual protection claims in 2016, totalling £77m over the year – its biggest-ever payout - as it introduced an early payment for death claims on all life products.

The mutual paid 100 per cent of 50 Plus claims, 98 per cent of life insurance claims, 92 per cent of critical illness claims and 90 per cent of income protection claims.

Total claims payouts reached almost 7,000 - around 2,000 more than the year before – with the highest amount, £600,000, for a critical illness claimant.

The most common conditions for critical illness claims were cancer (65 per cent), heart-related conditions (13 per cent) and strokes (7 per cent), while the most common claims for income protection were for musculoskeletal disorders (23 per cent), mental health issues (14 per cent) and cancer (14 per cent).

In support of work carried out by the Protection Distributors Group (PDG) on its Funeral Pledge, the insurer has also this month introduced an early payment of up to £10,000 for death claims on all life products, which will be offered automatically to all claimants who qualify and can be paid within 24 hours.

Lucy Brown, of London and Country Mortgages, and a PDG Member, said: "It's fantastic LV= has introduced this benefit and are offering more than we hoped for. It's great news for consumers and particularly their families."

Myles Rix, managing director of protection at LV, said: “Last year we continued to invest in our claims service to make it as quick and easy as possible for our customers to claim and this is reflected in these numbers.

“£77m is the most we have ever paid out for individual protection claims and we’re pleased we have been able to help even more families in their time of need. 

“While we know some consumers worry that claiming for a protection policy will be a difficult process, these numbers demonstrate that the overwhelming majority of cases are paid out. 

“We urge advisers to use information such as this to help their clients understand the value of protection policies, and demonstrate the financial peace of mind they can provide.”

Brian Hill, independent financial adviser at Jones Hill Ltd in Bradford on Avon, commented: “It is really good for the industry to get clarity and transparency on these claims figures, and it can only give clients confidence knowing that insurers are not there to rip them off.

“On the other hand, there are some decreases in claims performance based on the 2015 figures, and that may indicate there have been changes in terms and conditions. It would be good for them to be able to explain why some claims are worsening compared to the previous year.”