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The figures from the ABI highlighted that 97% of life insurance claims were paid, with the average payout of £46,000 on policies equating to two and a half times the average annual take-home salary.
The average payout on a critical illness (CI) insurance policy was £59,000, with 92% of claims being paid (up from 80% in 2005).
Last year the average claim on income protection (IP) policies was for an annual figure of £14,000, paying out on average for 260 weeks (five years) to help those unable to work.
“The insurance industry pays out £6.7m every day in individual life, critical illness and income protection insurance claims, making a real difference to people’s lives at the most difficult of times,” said Stephen Gay, the ABI’s Director of Savings and Protection.
“Insurance companies want to pay all valid claims. It is important that all insurance policies are clear so that customers are able to understand the circumstances in which they can make a claim.
“The ABI is always looking at ways to reduce the number of claims that are declined, for example because the customer has not provided all relevant information to their insurer, or has not understood that the claim they want to make is not covered by insurance.”
The ABI outlined that measures such as the Code of Practice on non-disclosure had helped to reduce the number of CI claims being declined as a result of customers not sharing key medical information with their insurance provider.
This process has also been aided by the introduction of standard definitions for Total Permanent Disability (TPD) in the Critical Illness Statement of Best Practice, according to the ABI.
You can compare life insurance policies with Money Expert.
