Income Protection Insurance Claim Payout Rates by Insurer

Income Protection is designed to replace a proportion of your salary if you’re medically unable to work due to any illness or injury.

So long as the policyholder has selected a plan with an ‘Own Occupation’ incapacity definition the Income Protection policy will pay out if they are unable to undertake their current job role.

A claim will start once the policyholder has been unable to work for the length of their deferred period. The deferred period is chosen at the outset of the policy and often ranges from a week up to 6 months.

The successful payout rate for Income Protection insurers is high across the market, hopefully providing reassurance that these plans will pay out in the event that illness or injury means you can’t do your job.

Overall Protection Payout Rates Across All Insurers

Each year the Association of British Insurers (ABI) publishes average payout rate statistics from across all insurers. The latest figures are from 2018 and show that 88.1% of all Income Protection claims were paid, with almost £650 million paid out in total.

From 2016, the Association of British Insurers is reporting Income Protection claims statistics differently. Previously, insurers included both ongoing and new claims in their payout rates and the sums they paid out each year.

Now only new claims are counted, which has affected the figures when you make a direct comparison to previous years,

Percentage of Income Protection Claims Paid by Insurer

The table below shows what proportion of income protection insurance claims were paid by each insurer (that published their payout rates).

As well as nearly every insurer sharing their claims payout data, certain providers now publish annual claims reports, providing detailed information on the common causes of claims, as well as reasons for rejections.

There is still a perception that these insurances don’t pay out, but fortunately the vast majority of claims are successful and provide an invaluable financial safety net for UK households.

Insurers
2016
2017
2018
Holloway Friendly
98%
96%

98%

Vitality Life
94%
96%

97.8%

Shepherds Friendly
97%
96%

95.8%

Cirencester Friendly
94%
94.7%

95.2%

Liverpool Victoria
90%
96%

95%

Legal & General
94.4%
95%

95%

Zurich
85%
87%

95%

British Friendly
96.1%
92.4%

94.7%

Aegon

85%

96%

93%

The Exeter
94%
91%

93%

Aviva
92.6%
88.8%

87.3%

Royal London
95.6%
92.1%

72.2%

IMPORTANT
The above Income Protection Insurance payout statistics shouldn’t be used to make an exact comparison of insurers but rather to get a general understanding of payout rates across insurers as a whole.

Insurers use slightly different criteria for categorising declined claims; for example, some insurers might treat a fraudulent claim as declined, whereas others could have a different way of classing them.

Give this, the above table isn’t a simple measure of whether which insurer offers the best Income Protection Insurance – one insurer might have better policy wording or could be more suited to you. That’s why it’s helpful to get advice from someone who knows the market and providers inside out.

Need Advice Choosing The Best Income Protection?

When considering income protection insurance, above all you’ll want to ensure that your selected insurer will pay the benefit you’re entitled to in the event of a genuine claim, being there when you need the financial support the most.

However, on top of claims data you’ll also want to know that you’ve chosen the best Income Protection for you as an individual, including finding an insurer that will be most suitable for your circumstances such as your medical history and general health and lifestyle.

Why Speak to Us…

We started Drewberry because we were tired of being treated like a number and not getting the service we all deserve when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to let us help.

  • There is no fee for our service
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    Drewberry isn’t tied to any insurance company, so we can provide completely impartial advice to make sure you get the most appropriate policy based solely on your needs.
  • We’ve got bargaining power on our side
    This allows us to negotiate better premiums for you than you going direct yourself.
  • You’ll speak to a dedicated expert from start to finish
    You will speak to a named expert with a direct telephone and email. No more automated machines and no more being sent from pillar to post – you’ll have someone to speak to who knows you.
  • Benefit from our 5-star service
    We pride ourselves on providing a 5-star service, as can be seen from our 2741 and growing independent client reviews rating us at 4.91 / 5.
  • Gain the protection of regulated advice
    You are protected. Where we provide a regulated advice service we are responsible for the policy we set-up for you. Doing it yourself or going direct to an insurer won’t provide this protection, so you won’t benefit from these securities.
  • Claims support when you need it the most
    You have support should you need to make a claim. The most important thing when it comes to insurance is that claims are paid and quickly. We are here to support you during the claims process and make sure it’s as smooth and stress free as possible.

I have always received great service and a great line of product for my employees. The staff has been very knowledgeable and I have enjoyed working with Nadeem on setting up our plan.

Kim Sysak
03/06/2020
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