Mutual insurer Royal London paid 99.6% of all protection claims last year, totalling a record of £591m and helping around 86,000 customers.
In 2020, Royal London paid out 235 claims on average per day.
More than £136m was paid in life and terminal illness claims. Nearly 1,500 term life insurance claims were paid (95.7%), an increase from 2019, with an average of £73,000 per claim. Terminal illness claims paid totalled more than £30m with an average payout of £135,000.
£314m was paid out in whole of life claims with 99.9% of claims paid. The average payout in 2020 was £3,820, up by 48% from 2019.
Royal London paid 92.4% of critical illness (CI) claims. On average more than £73,000 was paid for CI claims with more than £133m paid in total. Of the CI claims that were declined, the majority did not meet the plan definition. The most common reasons for a CI claim in 2020 were cancer (63%), heart attack (12%) and stroke (7%).
IMore than £4.1m was paid in new and existing income protection (IP) claims in 2020, with an average of around £5,500 per claim. Fewer than 7% of IP claims were not paid due to misrepresentation or a claim not meeting the plan definition. The average IP claimant was 40 years old.
Of all protection claims received 0.4% were not paid out due to either misrepresentation or the claim not meeting the policy definition – both at 0.2%.
Craig Paterson, chief underwriter at Royal London, said: “Last year we paid £591m in protection claims, a record figure for Royal London. We recognise that it has been a challenging year in many ways, and the pandemic has had a devastating impact on many families. In 2020, we paid out more than £13m to families who had experienced a death due to Covid-19.
“In addition to paying claims for Covid-19, customers are also able to get support through Royal London’s Helping Hand service. Customers and their families can receive access to the support of a dedicated nurse with tailored and personal support whenever it’s needed, for as long as it’s needed.
“Receiving a payout can help to ease the financial strain of bereavement or falling seriously ill, but our Helping Hand service offered through all of our protection policies can help to ease the emotional strain.”