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Life Insurance Claim Payout Rates by Insurer

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Life Insurance pays out a lump-sum to the family of the policyholder if they were to pass away during the term of the policy.

Many people are worried that Life Insurance may not pay out when their loved ones need it the most, but this page aims to provide an indication of just how good insurers are at paying Life Insurance claims.

The statistics below cover the payout rates for both Level Term and Decreasing Term Life Insurance – successful claims for Whole of Life Cover are often higher.

While Life Insurance often includes Critical Illness Cover, the below Life Insurance payout data refer to standalone life cover only.

When Does Life Insurance Pay Out?

Life Insurance is designed to pay your loved ones a cash lump sum should you die while the policy is in force. The below statistics cover term insurance claims, so these are policies that run for a set term and then cease.

Many plans can also pay out early if the policyholder is diagnosed with a terminal illness (there is usually the requirement that the policyholder be diagnosed with less than 12 months to live).

When Might Life Insurance Not Pay?

For the small proportion of life cover claims that are declined there are two main reasons: fraud and a lack of disclosure when taking the policy out.

Fraud occurs when someone makes a fake Life Insurance claim. It’s usually a deliberate act by the policyholder who is not, in fact, deceased or terminally ill.

Fraud will account for some of the below insurers’ declined claims, but assuming your family is making a genuine claim this isn’t anything to worry about.

Another small proportion of Life Insurance claims are declined due to a lack of disclosure. However, this can easily be avoided by being honest and forthright about your medical history when you take out the policy.

samatha haffenden-angear, independent protection expert at drewberry

When you apply for Life Insurance through Drewberry, we’ll help you run through all of the necessary medical questions to get the policy in place. Providing you’re totally upfront when answering these questions, it’s unlikely your loved ones will have any issues claiming later on.

Samantha Haffenden-Angear
Independent Protection Expert at Drewberry

ABI logo

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 98% of all Life Insurance claims were paid, with over £2.79bn getting paid out in total. The average payout on a Life Insurance policy in 2017 was more than £78,000.

Percentage of Life Insurance Claims Statistics by Insurer

The table below shows what proportion of life insurance claims were paid by each insurer that published their claims data and cover the three years to 2017, the latest year for which data are available.

As you can see, the vast majority of Life Insurance claims are successful and result in a payout.

Insurers
2015
2016
2017
AIG
92.2%
95%
99%
Vitality Life
99%
99%
99%
Zurich
98.5%
98%
99%
Scottish Widows
98.9%
99.4%
98.99%
Aviva
98.9%
98.9%
98.9%
Aegon
98%
98%
98%
Legal & General
97.9%
98.6%
98%
Royal London
98%
96.8%
97.3%
Liverpool Victoria
97%
98%

95%

Important Disclaimer

These Life 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 the industry. This is largely because insurers use slightly different criteria for categorising declined claims.

Victoria Slade Independent Protection Expert at Drewberry

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 which insurer is best for Life Insurance – one insurer might have better policy wording or could be more suited to you even though payout rate may be slightly lower.

Victoria Slade
Independent Protection Expert at Drewberry

Need Advice on Choosing the Best Life Insurance?

When you take out Life Insurance, it’s obviously hugely important for you to be able to compare insurers and be sure that the provider will pay out to your family in the event of a genuine claim.

However, you’ve also got to consider how to find the best Life Insurance for you given your circumstances, such as your health and lifestyle. Some insurers also offer additional benefits when you take out life cover with them – these can often be very good.

As such, the process of finding the best policy for your needs requires you to look beyond simple claims data and at a number of other personal and policy factors – this is something the team at Drewberry would be more than happy to help with.

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
  • We are independent and impartial
    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 2335 and growing independent client reviews rating us at 4.92 / 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.
Rob HarveyHead of Protection Advice at Drewberry

If you would like help and advice comparing Life Insurance quotes and policies, or want to discuss the merits of each insurer with one of our protection advisers, don’t hesitate to pop us a call on 02084327333.

Rob Harvey
Head of Protection Advice at Drewberry

Good interaction between client and advisor. Drew knew his brief; articulated and explained the issues clearly and answered questions fully. This all helped me clarify what I wanted and so we agreed on our action swiftly. I am a very satisfied client. Thank you.

Ronald Lofkin
25/07/2019
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