Drewberry™ provide pensions, investment and insurance advice for Money to the Masses readers throughout the UK.

 

Income Protection Insurance Claim Payout Rates by Insurer

Written by:
Andrew Jenkinson
Director at Drewberry™

This page should help to provide an indication of how good insurers are at paying Income Protection claims.

Income Protection offers accident and sickness cover, replacing a proportion of your salary if you’re medically unable to work.

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.

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When Does an Income Protection Policy Pay Out?

Income Protection Insurance pays out a monthly benefit to the policyholder should if accident or sickness stops them being able to work.

Key Options to Consider When Looking at Income Protection…

  • How much benefit would you need each month to survive (insurers usually offer up to 60% of gross monthly income)?
  • How long you could last on savings and support from friends and family before you need the insurance to pay you an income (known as the deferred period)?
  • Do you want long-term Income Protection so you’re covered up to retirement age, or short-term protection which is cheaper but only pays out for a limited period, potentially leaving you without income if you still can’t work?
  • Additional benefits – some Income Protection insurers include extras as part of the policy, many of which are fantastic additions.
ABI

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 2017 and show that 87.2% of all Income Protection claims were paid, with over £600 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 last year.

 

Insurer Claims Statistics

 

When choosing our personal protection we want to know it is going to pay out when we need it to.

By choosing a product or specific insurer from the menu below you will be able to view the claims payout rates for all of the main UK insurers for income protection, life insurance and critical illness insurance.

Insurer
2015
Percentage of Successful Claims
2016
Percentage of Successful Claims
2017
Percentage of Successful Claims
Critical Illness Insurance
Zurich
92%
90%
95%
Aegon
97%
95%
94%
Aviva
92.5%
92.3%
93.2%
AIG
91.4%
92.3%
93%
Legal & General
91.5%
92.6%
92%
Vitality Life
-
-
92%
Royal London
93%
92.2%
91.2%
Liverpool Victoria
91%
90%
88%
Friends Life
93%
-
-
Income Protection
Aegon
85%
85%
96%
Liverpool Victoria
92%
90%
96%
Vitality Life
-
94%
96%
Holloway Friendly
96.9%
98%
96%
Shepherds Friendly
97.6%
97%
96%
Legal & General
95%
94.4%
95%
Cirencester Friendly
94%
94%
94.7%
British Friendly
97.8%
97%
92.4%
Royal London
94%
95.6%
92.1%
Exeter
94%
94%
91%
Aviva
92.4%
92.6%
88.8%
Zurich
87%
85%
87%
Friends Life
84%
-
-
Life Insurance
Zurich
98.5%
98%
99%
Vitality Life
99%
99%
99%
AIG
92.2%
95%
99%
Scottish Widows
98.9%
99.4%
98.99%
Aviva
98.9%
98.9%
98.9%
Legal & General
97.9%
98.6%
98%
Aegon
98%
98%
98%
Royal London
98%
96.8%
97.3%
Liverpool Victoria
97%
98%
95%
Friends Life
99%
-
-
 

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.

Rob Harvey
Head of Protection Advice at Drewberry

Insurers
2015
2016
2017
Aegon
85%
85%
96%
Liverpool Victoria
92%
90%
96%
Holloway Friendly
96.9%
98%
96%
Shepherds Friendly
97.6%
97%
96%
Vitality Life
96%
94%
96%
Legal & General
95%
94.4%
95%
Cirencester Friendly
94%
94%
94.7%
British Friendly
97.8%
96.1%
92.4%
Royal London
94%
95.6%
92.1%
The Exeter
94%
94%
91%
Aviva
92.4%
92.6%
88.8%
Zurich
87%
85%
87%
  

Important Disclaimer

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.

Victoria Slade
Independent Protection Expert at Drewberry

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Neil
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Robert
Income Protection

Need Advice on Choosing the Best Income Protection Insurer?

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.

samantha-haffenden-angear

At Drewberry we have the expertise and knowledge to find the best cover for you and your circumstance from across the entire UK market.

We’ll do all of the legwork from start to finish, including completing the application with you over the telephone. So for expert help and advice comparing Income Protection Insurance and to discuss the relative merits of each insurer, all you need to do is pop us a call on 01273646484.

Samantha Haffenden-Angear
Independent Protection Expert at Drewberry Insurance

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