A new payout rate tool is now available on the site showing the payout rates across eleven different insurers for income protection, critical illness insurance and life insurance. The tool allows you to select from a list of the key providers including Aviva, British Friendly, Legal and General and Scottish Provident.
As this tool offers a quick way of checking the payout rate, we hope that it will help you to make an informed decision when selecting an insurance product and provider.
Campaign for the disclosure of payout rates
Following a long campaign by the Income Protection Task Force (IPTF) all of the major insurance providers have now disclosed their payout figures for income protection, with Friends Life publishing their rates last month. This is great news for the industry as it reassures customers that insurance does pay out.
Our 2013 Health and Protection Insurance Survey showed that the public perceive payout rates for life insurance to be much lower than they actually are; they estimated that 50% of claims were paid out when the true figure was actually 98% across the top five insurers.
Looking at the latest figures the average payout rate for Income Protection across eleven providers was almost 90% in 2012 with some providers paying out as much as 97% of claims. For critical illness insurance the average payout rate across eight providers was 91% and for life insurance it was over 97% across five providers.
When choosing a policy there is no substitute for advice; there are many other factors to consider such as how long the insurer would pay out, your budget, your occupation and whether you have a pre existing medical condition. Therefore it is essential to speak to a qualified adviser before taking out cover.