The large cap insurer Zurich releases its critical illness claims statistics for 2009. The insurer stated that it paid out 91.1% of all critical illness claims made last year, totaling 814 claims settled. This figure represents a rise of 9.1% on the 746 claims paid in 2008 and a 28% rise since 2005. The total amount paid out in 2009 totaled £62.3 million, relative to £58.5 million in 2008.
Of the 9% of claims that were refused in 2009, 8% were declined for not meeting the critical illness definition and only 1% were refused for non-disclosure at the application stage. Of the largest causes for claims being paid, approximately 48% of claims were for cancer related conditions, followed by heart attack and then stroke.
It is very encouraging to see another insurer release a critical illness payout ratio above 90%. Last month Legal & General and Axa also released figures in excess of 90%, with Legal & General paying out 94% and Axa paying out 93% of all claims made. However, these figures do tentatively suggest that Zurich are being slightly more stringent with their critical illness definition having refused 8% of claims for not meeting the definition, relative to only 4% for Legal & General.
Critical illness cover is a popular form of personal and mortgage protection (please see our mortgage critical illness cover guide). The policy pays out a tax-free lump-sum if the policyholder suffers a specified critical illness, such as cancer, stroke or heart attack. It can be taken out as a standalone policy although it is more common for it to be combined with standard life insurance or mortgage life insurance.
The number of claims paid out in 2009 by the UK’s leading insurers demonstrates the benefit of such policies for protecting both individuals and families. According to www.stroke.org.uk in the 12 months prior to May 2009, 150,000 people will have suffered a stroke, 10,000 of whom will be under retirement age.