Critical Illness payouts rise above 88% as non-disclosure plummets
The Protection Insurance industry proves it has almost eradicated non-disclosure as a major problem.
Claims figures August 2009 (see table below)
- Industry average paid out – 88.4%
- Industry average declined for non-disclosure – 2.5%
Research by Protection specialists LifeSearch has revealed that insurers are now paying out on over 88% of all Critical Illness claims on average, compared to just 84% when the last set of LifeSearch figures were published in October 2007.
For years, Critical Illness policies have been derided as the product where a claim is likely to be rejected. There are two reasons a claim can be rejected:
- not meeting the definition, which means the condition isn’t covered by the policy or isn’t severe enough
- non-disclosure, where the insurer rejects the claim because the client withheld crucial information during the application process
Of these two, non-disclosure has proved to be the source of most complaints. The latest figures prove only 2.5% of claims were declined for this reason. That compares to 8% in the last set of research published in 2007.
Matt Morris, Senior Policy Adviser at LifeSeach, said: “There are two important reasons for this fall. The first is the work of the ABI and insurers, who have put in place new classification systems that has increased paid claims. The second is the publication of claims stats, which LifeSearch pushed for several years ago, and served to highlight the areas where insurers needed to improve. Consumers are now seeing the benefits.”
All figures are for the whole of 2008 unless otherwise stated:
Insurer |
Claims paid information |
Claims declined information |
AEGON |
Paid – 91% |
Declined - 9%
Non-disclosure – 3.7%
Not meeting definition – 5.3% |
AXA |
Paid – 87% |
Declined – 13%
Non-disclosure – 9%
Not meeting definition – 4% |
Bright Grey
(April 2008 – March 2009) |
Paid – 83% |
Declined - 17%
Non-disclosure – 1.8%
Not meeting definition – 15.2% |
BUPA |
Paid – 86% |
Declined - 14%
Non-disclosure – 2%
Not meeting definition – 12% |
Fortis Life |
New to market July 2008 |
|
Friends Provident |
Paid – 87.3% |
Declined – 12.7%
Non-disclosure – 4%
Not meeting definition – 8.7% |
Legal & General |
Paid – 93% |
Declined - 7%
Non-disclosure – 4%
Not meeting definition – 3% |
LV= |
Paid – 86.7% |
Declined – 13.3%
Non-disclosure – 0.7%
Not meeting definition – 12.6% |
Aviva |
Paid - 90% |
Declined – 10%
Non-disclosure – 2%
Not meeting definition – 8% |
PruProtect |
New to market September 2007 |
|
Royal Liver |
New to market October 2004 |
|
Scottish Provident |
Paid 86.7% |
Declined - 13.3%
Non-disclosure – 3%
Not meeting definition – 10.3% |
Scottish Widows
(Nov 2007 – Oct 2008) |
Paid 88% |
Declined – 12%
Non-disclosure – 2%
Not meeting definition – 10% |
Skandia |
Paid – 89% |
Declined – 11%
Non-disclosure – 0%
Not meeting definition – 11% |
Standard Life |
Paid – 90% |
Declined – 10%
Non-disclosure – 0.2%
Not meeting definition – 9.8% |
Zurich |
Paid – 91% |
Declined - 9%
Non-disclosure – 0.4%
Not meeting definition – 8.6% |
AVERAGE |
Paid – 88.4% |
Declined – 11.6%
Non-disclosure – 2.5%
Not meeting definition – 9.1% |
Source: www.lifesearch.co.uk Enquiries
Notes to editors
- About LifeSearch
- LifeSearch can source case studies where required and can provide tables of typical premiums.
- Consumers can now buy Protection Insurance products online with regulated advice in a quick and simple format for the first time ever without having to deal with an adviser at www.getliferight.co.uk.
- Contact LifeSearch
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