Aviva has paid more than £1bn to its individual protection customers in a year in which the pandemic had a mixed impact on new mental health income protection claims.
The insurer revealed this morning that it made its highest ever payout to customers claiming on life insurance, critical illness cover and income protection policies last year and of all claims that were received, fewer than two in every 100 were declined.
The figure includes £38.9m paid out for claims relating to the impact of Covid, with most claims paid to bereaved families on life insurance policies. Other claims paid out included income protection payments and rehabilitation support for the effects of long Covid.
Around 4,400 claims were paid on income protection policies, with £44.7m of benefits paid to customers who could not work due to illness or injury. Just over 1,650 of these were new claims accepted, equivalent to 87.5% of new claims made.
The average age of customers beginning a claim was 43 for men and 40 for women, with musculoskeletal conditions cited as the most common reason for new claims in 2020, at 30%. Mental health made up 24% of new claims, followed by cancer at 9%.
But Jacqueline Kerwood, claims manager at Aviva, told Health & Protection in spite of the pandemic that there had only been a 1% increase in new mental health income protection claims on the previous year.
“I think that’s probably due to a few things. Of course there will be people who have struggled in the lockdown and the financial impact may have impacted their mental health but on the flip side we are now a nation that’s working more flexibly… Maybe for some people they have a better work/life balance so there is an element of… positive mental health benefits as well as negative ones…
“The financial support that was put in place through the pandemic has inevitably helped with some of the financial worries for a lot of people.”
The data also reveals fewer critical illness claims were received in 2020 than in previous years, with £314m paid out to around 4,300 customers, down 13% in volume compared to 2019.
Increased NHS waiting times resulting in delays in NHS screening, diagnosis and treatment, appear to have affected critical illness claims for cancer, Kerwood added. In 2020, cancer claims accounted for 57% of claims, down on previous years where cancer has accounted for more than 60% of claims.
Aviva paid 92.7% of all critical illness claims received with fewer than six in every 100 claims received declined because the policy terms and conditions were not met. Fewer than two in every 100 claims were declined due to misrepresentation of relevant health and lifestyle information.
While cancer claims were down year-on-year, it remained the most common reason for claim, accounting for 78% of all claims by women and 49% for men.
Overall, more than £682m was paid out on life insurance, over 50s and Whole of Life plans, with 42,000 claims where the customer had died or met the terminal illness benefit definition. In these cases 99.3% of all claims were paid.
Fewer than four in every 1,000 of these claims made were declined due to misrepresentation of relevant health and lifestyle information and fewer than three in every 1,000 were declined as the terms and conditions of the policy were not met.
Around 2,150 claims were for deaths due to Covid, the fourth most common reason for claim at 4.7% of all claims. Cancer was still the most common reason (28%), followed by cardiovascular illness (12%) and respiratory illness (5%).
The year also saw the insurer provide more rehabilitation support to individual income protection customers than in previous years. Through the support of the insurer’s in-house rehabilitation team, referring to clinical support for counselling, physiotherapy and other services where appropriate, nearly three-quarters (73%) of all rehabilitation cases either returned to or remained at work.
While 12.5% of new claims received were declined, just over six in every 100 claims received were declined for misrepresentation of relevant health and lifestyle information and just over six in every 100 were declined as the terms and conditions of the policy were not met.
Touching on the insurer’s rehab support services, Kerwood added the firm launched a service in the past year that helps customers who have had to take time off work or reduce their workload as a result of suffering from Covid symptoms.
“We have set up a Covid rehab support service which has allowed some people to remain in work and allowed some other people to receive support physiotherapy, counselling, graded exercise therapy which has enabled them to recover more quickly and return to work…”
Ultimately, Kerwood adds, the data reflects the importance of having protection in place.
“It’s not just the traditional benefits of having money paid at the end of a protection claim because there is that whole wellbeing piece of how you can keep people well, how you can help support them, keep them in work and also with the NHS struggling, some of the other added services that we can provide so people can look after their own health without necessarily having to go to their GP as that first point of contact.
“So I think the value has been much more than the amount of money that we have paid. It’s been all of that support that is linked to protection products that customers can take advantage of.”
