The vast majority (92%) of critical illness claims were paid with the average pay out being £83,176 and the largest amounting to over £1.4m. Over the period, 15 payments were also made to families of children with life threatening illnesses totalling £290,000 - an additional benefit of critical illness policies that is often overlooked.
Just 7% of critical illness claims were declined because the definition of an illness was not met. Fewer than 1% were declined because of non-disclosure of medical information and in the majority of these cases the customer had not disclosed ongoing treatments and medical investigations. Cancer remains the most common reason for claims at 57%; followed by heart attack – 15%,
Stroke and Multiple Sclerosis – 7% and 5% respectively.
For income protection, 3,600 payments were made to customers including 33 new claims. Twenty seven of these were paid representing a payment rate of 82%. Two cases were declined (6%) where was no loss of income to replace, 2 for non-disclosure of medical information, 1 (3%) as a customer was not in paid employment, and a further claim because the definition of an illness was not met.
Ninety eight percent of life claims were paid during H1 to 854 beneficiaries with 2% declined for non-disclosure.
As well as work across the industry to increase transparency and improve pay out rates, investment continues in reducing claim turnaround times. Over half of critical illness claims for instance, were paid within 29 days while £3.3m of benefit was paid out within 10 days of notification.
To make life claims easier, these are paid without grant of probate up to £50k to an individual or up to £100k if a solicitor is involved. And if probate is needed, advance payments can be made to clear any of the estate's liabilities, for example funeral costs, inheritance tax liability or the repayment of outstanding mortgages or loans.
Geoff Butcher, Zurich’s UK Life Chief Claims officer said:
“We believe it is important to publish our claim statistics to reassure customers that the vast majority of claims are paid out and why some are declined.
“We’re committed to supporting customers, both in educating them on the importance of being as open and honest as possible at the application stage, and in making the claims process as smooth and simple as possible. This includes ongoing investment to settle claims more quickly with initiatives like increased use of text and email to provide regular updates, dedicated claims specialists and direct credits to customer bank accounts.”
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