Insure to protect

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No one knows what is round the corner, which is why we think protecting yourself and your family against the worst is vitally important.

But they won’t pay

In our article here we reveal that the most recent statistics from the Association of British Insurers state that 98.3% of claims were paid in 2019. We presume some claims would have been ongoing at the end of the year. 

Uberrima fides

For many years insurance contracts we’re Contracts of Utmost Faith (Uberrima fides), a position established in Carter v Boehm (1766). The fundamental principal of which was that the party seeking insurance should disclose to the insurer everything they may reasonably expect the insurer would want to know. This form of disclosure remained largely unchanged until the Consumer Insurance (Disclosure and Representations) Act 2012 which changed the focus  to the insurer asking more specific questions and the consumer being subject to a legal duty to not make any misrepresentations to the insurer.

The majority of a minority

The Association of British Insurers’ data tells us categorically that the vast majority of the minority of claims which are not paid out is because there was either misrepresentation of true facts or non-disclosure. Simply put: no payout for misrepresentation and non-disclosure.

Claims get paid

Figures collected by the ABI highlight that between 1 March and 31 May this year:

  • 6,689 claims were received under individual protection policies, with 351 claims under group  schemes (also including a small number of critical illness and total permanent disability claims), with a total of £90 million paid. These figures equate to 77 claims worth £980,000 every day during the period during the period in which the data was collected.
  • The vast majority of these claims -83% – have been paid so far. Across life insurance claims, these figures show that every life insurance claim has so far been accepted.
  • The average payout on term insurance is expected to be £63,000, with an average payout of £137,000 on group policies

What covers what? Types of personal protection insurance explained:

  • Critical Illness: A policy that pays out a lump sum, or ongoing payments, when the policyholder is diagnosed with a specified illness. Cancer is the most common cause of claim. 
  • Term Life Insurance: A policy that will cover the policyholder for a specified number of years, usually until retirement age. This policy pays a lump sum, commonly used to cover outstanding mortgage payments, if the policyholder dies unexpectedly or prematurely. 
  • Total Permanent Disability: This benefit pays a lump sum, or lifelong payments to the policyholder if they become permanently disabled. 
  • Whole of life Insurance: A product that covers the policyholder until the day they die. It allows the policyholder to build a small pot of savings to use to cover funeral costs, or to leave a small inheritance to family members. 
  • Income Protection: A policy designed to help fill income gaps when a person is unable to work due to illness or injury. It will usually cover a percentage of the policyholder’s salary and will often provide support services to help employees back into work. 

If you’d like to understand more about how personal protection insurance protection may help or your loved ones, please get in touch. Remember, we’re here to help you.

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