Zurich UK Life has paid out £12.3m to 689 income protection customers who were unable to work for long periods through illness, accidents or disability - with 94% of claims successful compared to 90% in 2012.
This amount is part of a total of £188.6m paid in protection related claims last year – including £65.2m for critical illness claims, £12.3m for income protection and £111m for death claims.
Of the 689 income protection customers receiving payments in 2013, 86 were new claims. Just 6% of claims were declined in total; 2.5 % because of non-disclosure - where the applicant didn’t provide all of the information that was required when the policy was taken out. 2.5% were declined because the definition of disability was not met and a further 1% were not successful because the customer was not in paid employment and so there was no income to replace.
Musculoskeletal problems (including spinal injuries) were the most common cause of claims (23); followed by neurological conditions including stroke (19) while mental health and cancer both resulted in 16 claims.
The average monthly benefit to our customers last year was £1,421 while our largest annual benefit was £59,000 per annum.
Peter Hamilton, Head of Retail Propositions for Zurich said:
“Across the UK we remain hugely under insured against the risks of being unable to work and provide financial support to our families in the event of illness. We also know that fewer than one in four people aged between 35-44* have any savings in place to act as a financial buffer should the worst happen. And at the same time, we’re seeing the cap in state benefits starting to take hold.
"The cost to those people whose lives are turned upside down by illness, as well as that to businesses and the state, means the current situation is unsustainable. To try and address how we as an industry might start to tackle this problem, we will soon be launching new research to explore how we can encourage people to consider income protection.
“By publishing this research and our claims figures, we want to help customers understand the importance and the need for protection – and to remind them of the enormous difference income protection payments can make if they become unable to work.
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