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

 

Life Insurance Claim Payout Rates by Insurer

This page should help to provide an indication of 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.

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.

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

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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 payout 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 out?

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

Being honest about your medical history means it's unlikely your life insurance claim will be turned down

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 accounts 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.

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

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 2016 and show that 98.3% of all Life Insurance claims were paid, with over £2.76bn getting paid out in total. The average payout on a Life Insurance policy last year was more than £75,000.

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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 2016, 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
2014
2015
2016
Scottish Widows
99%
98.9%
99.4%
Vitality Life
99%
99%
Aviva
99%
98.9%
98.9%
Legal & General
98.3%
97.9%
98.6%
Liverpool Victoria
98%
97%
98%
Zurich
99.8%
98.5%
98%
Aegon
98%
98%
98%
Royal London
98%
98%
96.8%
AIG
92.2%
95%
Friends Life
99%
99%
Note that Friends Life has now merged with and operates as part of Aviva.
 

Important Disclaimer

The above 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 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 is best for Life 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

 

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
2014
Percentage of Successful Claims
2015
Percentage of Successful Claims
2016
Percentage of Successful Claims
Critical Illness Insurance
Aviva
93.2%
92.5%
92.3%
Legal & General
92.2%
91.5%
92.6%
Liverpool Victoria
88%
91%
90%
Zurich
91%
92%
90%
Friends Life
94%
93%
-
Scottish Provident
94%
-
-
Aegon
93%
97%
95%
Bright Grey
94%
-
-
Royal London
94%
93%
92.2%
AIG
-
91.4%
92.3%
Income Protection
British Friendly
96.7%
97.8%
97%
Exeter
94%
94%
94%
Cirencester Friendly
94%
94%
94%
Aviva
93.2%
92.4%
92.6%
Legal & General
93.9%
95%
94.4%
Liverpool Victoria
85%
92%
90%
Zurich
93%
87%
85%
Friends Life
86%
84%
-
Aegon
92%
85%
85%
Vitality Life
-
-
94%
Royal London
90%
94%
95.6%
Holloway Friendly
96%
96.9%
98%
Shepherds Friendly
96.7%
97.6%
97%
Life Insurance
Aviva
99%
98.9%
98.9%
Legal & General
98.30%
97.9%
98.6%
Liverpool Victoria
98%
97%
98%
Zurich
99.8%
98.5%
98%
Friends Life
99%
99%
-
Aegon
98%
98%
98%
Scottish Widows
99%
98.9%
99.4%
Vitality Life
-
99%
99%
Royal London
98%
98%
96.8%
AIG
-
92.2%
95%
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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.

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 hesitiate to pop us a call on 01273646484.

Rob Harvey
Independent Protection Expert at Drewberry

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