The UK group risk industry paid out a total of nearly £1.5bn during 2016, providing financial support to a record number of families.
The total figure, published by Group Risk Development, (GRiD) represents a £100m increase on 2015.and enabled a total of 24,925 UK families to maintain their household’s financial resilience after the death, illness, accident or disability of a breadwinner.
Group life (GL) policies paid out total benefits to the value of £1.067bn, while group income protection (GIP) payouts totalled £358.7m a year and group critical illness (GCI) payouts totalled £71.6m.
All of these figures represent an increase on the previous year’s statistics.
The average claims amounts were £114,239 for group life, £24,740 a year for group income protection and £65,704 for group critical illness.
Cancer was the main cause of claims across all three groups, representing 68 per cent of those for group critical illness, 43 per cent of those for group life and 24 per cent of those for group income protection.
Some 47 per cent of group critical illness claims turned down in 2016 were declined due to the employee’s condition not meeting the definition of critical illness being claimed for, 37 per cent because the claim was for a pre-existing medical condition and 11 per cent because the claim was not covered under the policy.
For group income protection, the main reason for not being able to pay claims was due to the fact that the employee did not meet the definition of disability under the policy terms.
Katharine Moxham, spokesperson for GRiD, said: “These figures give insight into the fantastic contribution of employer-sponsored group risk protection benefits in supporting people when they need it most.
“These policies pay out in dreadful circumstances for employees and their families. It’s excellent to be able to quantify the extent of the support we give as an industry through publishing these figures.”
Paul Holiday, financial adviser at Norwich-based GreenSky Wealth Ltd, said: “Group protection policies are very good value – any business done on a group basis is good premium-wise.
“I think a lot of employers are now looking at extra benefits such as life cover, income protection and private medical.
"From their point of view, the quicker they can get an employee back to work, the less the impact on that business. It is definitely something that has come more to the fore.”
simon.allin@ft.com
