Zurich protection claims payments up 23% in 2020
23 March 2021
- Over 6,000 life, critical illness and income protection customers have received payments worth over £353.7 million, up 23% on the previous year
- Life insurance payments increase by more than a quarter to £279.6m million in past year
- 15% drop (nearly £12m) in critical illness payments, with customers unable to access treatment and diagnosis
- £20m of life insurance claims are directly linked to Coronavirus, with the youngest claimant aged just 34. Men accounted for two thirds of all claims
- Mental illness accounted for over a quarter of income protection claims, totalling almost £1.7m, followed by 22% for cancers
Leading insurer Zurich today publishes its life insurance claims data for the last year, showing payments to customers with life insurance policies jumped by over a quarter (27%). In total, over £353.7m was paid to over 6000 life, critical illness and income protection policy holders compared to £287.6m paid in 2019.
While payments to nearly 5,000 beneficiaries of customers with life insurance represented a jump of over a quarter (nearly £76m from £203.9m in 2019 to over £279.6m in 2020), those for customers with critical illness policies dropped by nearly £12m (15%). Just over 1,000 customers benefitted from payments of £64.7m compared to £76.4m in 2019.
This is likely to be a consequence of fewer people accessing medical advice and this will be for a variety of reasons – not wanting to put pressure on the NHS, perhaps believing symptoms weren’t serious enough; fear of potential infection or appointments not being available.
According to Cancer Research UK, as many as three million people have missed out on cancer screening because of Coronavirus, with nearly a million women missing out on testing for breast cancer alone. The charity estimates there could be 8,600 women who are now living with the disease undetected. This is a particular concern given breast cancer continues be the most common cause of critical illness claims (19%) for the insurer.
Zurich’s life insurance claims directly related to Covid have been valued at around £20m* with £15m already paid out and more expected in the coming months. The average age of claimants was 78 with the youngest just 34. Women accounted for some 35% of claims, compared to 65% for males.
Claims for customers with income protection policies also decreased, with £6.6m worth of benefits issued in 2020 compared to £7.2m in 2019. Mental illness accounted for over one in four claims (27%), followed by 22% for cancers and 20% for musculoskeletal conditions.
On top of this financial support, hundreds of customers also benefited from Zurich Support Services, a free policy add-on, giving them access to counselling, therapy and advice on legal and financial matters.
As well as offering flexible options to help people maintain their life cover, Zurich introduced a fast track claims process last year, including removing the need for grant of probate for claims up to £85k.
Commenting on the data, Peter Hamilton, Zurich’s UK Head of Market Engagement added; said, “While these figures help to reinforce the fact that life insurance continues to support people and their loved ones through and following illness, the fall in critical illness claims is a worry if it means customers aren’t getting the diagnoses and treatment they need. Finding and addressing problems early can reduce long term impacts and we would encourage all customers to seek appropriate help and treatment both via the NHS and through any support they have with their cover.
“Though 2020 has presented us all with challenges, it has been reassuring to see at first hand, how protection cover has made such an enormous difference to so many customers and their families at what is likely to have been the most difficult time of their lives.”
Claims paid for life, critical illness and income protection policies
| Payments | % paid | % declined |
|---|---|---|
| Life Insurance: £279.6m | 98% | 2% |
| Critical illness: £64.7m | 87% | 13% |
| Income Protection: £6.6m | 85% | 15% |
Zurich pays all valid claims though unfortunately we still see examples where customers have not disclosed key parts of their medical history when submitting applications. Non-disclosure of medical information/history continues to be the main reason for claims being declined as illustrated in the anonymised examples below.
Life insurance
One customer with a life insurance policy was insured for £100k following a straight-forward application with no previous medical problems. In 2020 a claim was made on behalf of the customer who died of multi organ failure. Medical records showed the customer had suffered a previous stroke, raised blood pressure and cholesterol. Cover would not have been offered had this information been disclosed on the customer’s application and so the claim was declined.
Critical illness
One customer with a critical illness policy (insured for £172.8k) made a claim following a diagnosis for MS in July 2019. The policy was bought October 2018. Medical evidence showed the customer had experienced symptoms in October 2018 though this information was not disclosed on application.
Income Protection
A male customer, employed as a carpenter with a standard policy that would pay out £1,500 per month for up to two years, made a claim following a fall. However medical records showed a 20-year history of back pain, elbow pain, inaccurate height/weight information, with a history of diabetes and excess alcohol consumption which led to the claim being declined.