Legal & General has revealed that it paid out a record 46 personal protection claims every day in the UK during 2021.
These totalled £797.9 million – an increase of £33.9 million from 2020 – and included 16,890 customers and their families.
The insurer has paid out more than £3.5 billion in claims over the past five years across its Life, Critical Illness Cover (CIC), Terminal Illness Cover (TIC) and Income Protection (IP).
Overall, the provider paid 97% of individual protection claims with an average pay out of £47,243. Of those not paid, almost nine in 10 were because of ‘deliberate or reckless misrepresentation’. Over 30% of misrepresentations were due to lifestyle factors “that should clearly have been in the customer’s knowledge”, with the majority of these being linked to alcohol.
As in 2020, the pandemic impacted the 2021 claims data; with almost one in seven life claims Covid-19 related. Legal & General paid out 1,579 Covid-19 life claims at an average of £46,769 per claim, making up a combined total of almost £74 million – over £34.6 million more than last year.
The difference in claims for men versus women when it came to Covid-19 related deaths is stark. Only 35% of Life Insurance claims came from women, compared with 65% from men. Legal & General’s figures continue to reflect those from the Office for National Statistics that show men are more likely to pass away from Covid-19 than women. In contrast, 60% of Legal & General’s overall Life Insurance claims are for men, again indicating an increase when looking at Covid-19 claims specifically.
Legal & General paid 417 IP claims in 2021, at a monthly average of £1,067 per claim, totalling over £3 million. The main cause of IP claims was musculoskeletal disorders (37%), followed by cancer (12.5%) and coronavirus (9.8%).
David Banks, director of claims and underwriting, said: “Paying claims is core to what we do. As we continue to come back from Covid-19, we remain focused on giving our customers and their loved ones financial support when they need it most. But more has to be done to tackle misrepresentation.
“At Legal & General we’re working closely with partners and distributors to help make the underwriting process as transparent and streamlined as possible. We hope that increasing knowledge around the lifestyle and general health information required will minimise misrepresentation and help us support even more customers in their moment of need.
“We’re proud to have paid out more than £797million in claims last year, but it’s the personal impact behind the figures that’s most important. We know an injury or illness affects the whole family, none more so than when it happens to a child. That’s why we have launched Project Smile. Our assessors get to know the families throughout the course of a claim – we wanted to go beyond just dealing with the paperwork and show that we are thinking of them through what is likely to be the most challenging time of their lives.”