Royal London paid out more than £500m in protection claims last year.
Claims statistics for 2017, published today (Wednesday), showed Royal London paid out more than £517m, which means 99.1 per cent of all claims received were paid.
Nearly £175m was paid in life and terminal illness claims, which means 97.3 per cent of term life insurance claims were paid, with an average of nearly £113,000 a claim.
The data also showed 92.3 per cent of terminal illness claims were paid with an average payout of more than £129,000 a claim.
Over £128m was paid in whole of life claims, which means 99.9 per cent of these claims were paid. The average payout was more than £4,000.
Craig Paterson, underwriting and claims philosophy manager at Royal London, said: "Paying a claim is our moment of truth and in 2017 we paid out over £0.5bn. This is a record amount and shows that the changes we have introduced to our claims processes and product definitions are translating into being able to pay more claims.
"Our fast-track claims process meant we were able to pay 85 per cent of claims within two days. These changes mean that people who claim can be paid without delay."
But the results also showed more than £200m was paid in critical illness (CI) claims, which meant only 91.2 per cent of claims were paid.
Royal London said 2 per cent of these claims were declined due to misrepresentation and 6.8 per cent did not meet the policy definition.
The average age of a CI claimant was 48 years old and the average payout was nearly £108,000. Cancer was the top reason for a CI claim which made up 61.8 per cent of claims. This was followed by heart attack, which made up 12.1 per cent of claims, while stroke accounted for 5.8 per cent of claims.
More than £3.9m was paid in income protection (IP) claims, which meant 92.1 per cent of claims were paid.
Of the 7.9 per cent of claims declined, 5.5 per cent were declined due to the policy definition not being met and 2.2 per cent due to misrepresentation.
The top three reasons for IP claims were for musculoskeletal conditions, which accounted for 28 per cent of claims, while mental health conditions accounted for 19 per cent and cancer was the cause for 12 per cent.
Martin Bamford, chartered financial planner and managing director for Surrey-based Informed Choice, said having almost 10 per cent of CI and IP claims rejected doesn’t help promote the importance of taking out cover.
He said: "The perception that insurance claims are often rejected is one factor making it harder for these products to be sold. When it comes to life assurance, we would expect to see a very high percentage of claims being paid, with the exception of the handful of cases where misrepresentation took place.
"Claims for insurance around critical illness and income protection are sometimes more nuanced, as conditions need to be met for the claim to be paid. But a perception that nearly one in ten of these claims was rejected does little to help boost the popularity of such an important cover. "