LV= paid a record £127m in individual protection claims in 2022 to more than 8,000 claimants and their families, with 95% of all individual protection claims made being approved.
The figure compares with £119m in protection claims in 2021 to more than 9,000 claimants, £117.8m to 9,500 claimants in 2020 and £108.8m to 8,100 claimants in 2019 before the pandemic hit.
While the data indicated a relatively low level of life claims that were rejected of 3%, this compared with 11.9% of critical illness claims, 14.2% of personal sick claims and almost 20% (19.8%) of income protection claims.
Life
Life insurance claims, which include those for term insurance, family income benefit, terminal illness and whole of life products, amounted to more than £80m, supporting more than 5,400 families and their loved ones.
The mutual approved 97% of life policy claims made.
The highest claim payment was £1m and the top causes of claims were cancer (40%), heart-related conditions (20%), respiratory (9%), Covid-19 (6%) and stroke (5%).
The average age at claim was 63 and the youngest was 25. The average age of policy at claim was eight and a half years.
Critical illness
The mutual approved 88% of critical illness (CI) claims made last year.
Including children’s claims, LV= paid out more than £28m in CI claims in 2022 to more than 360 individuals and families, with the highest payment being more than £400,000.
This was compared to 2021 when it approved 93% of CI claims, and paid out £28.2m to 376 claimants.
Cancer accounted for 56% of all CI claims in 2022, followed by heart attack (14%) and stroke (7%). Almost six out of 10 claims were made following a cancer diagnosis, with breast (24%), prostate (14%), bowel (13%) and skin (10%) accounting for the most.
LV= paid more than £544,000 for 25 claims involving children from new born to 17 years old.
While the average age of claimant was 47, the youngest claimant was just 22. The average age of policy at claim was eight years and four months.
Income Protection
LV= approved 80.2% of new income protection (IP) claims in 2022.
It paid almost £15m in benefits to more than 1,000 individuals and families, with new claimants receiving £2.3m, and those already in payment continuing to be paid £12.4m.
In 2021 82% of new claims were approved with £13.6m paid to 957 claimants.
Musculoskeletal issues (25%), cancer (20%), mental health (12%) and fractures (10%), accounted for over half of all income protection claims in 2022. The top occupations making a claim were doctor, dentist, nurse, teacher and vet.
The claims data also showed 134 individuals were supported with their recovery, 81% of referrals were for treatment and 19% for vocational rehab.
Over £63,000 was paid to 48 individuals who suffered a fracture, £30,000 to five families who lost a loved one and over £47,000 in parent and child claims to six families.
Personal sick pay claims
The mutal paid 85.8% of new claims for personal sick pay protection in 2022, which is designed for those in higher risk occupations and those who are self-employed and contract workers
More than £3m was paid out to more than 1,100 individuals, with £2.2m paid to new claimants and a further £1.1m to those already in payment that continued.
The youngest claimant was 22 and the top reasons for claims were musculoskeletal (38%), Covid-19 (15%), fractures (12%), coughs, colds (5%) and mental health (4%). The top occupations to claim were warehouse worker, carpenter, builder, HGV driver and nurse.
The average age of policy at claim was four years and three months.
Reasons for rejecting claims
In total, LV= paid almost 95% of protection claims in 2022. Reasons for rejecting claims included failing to disclose existing medical conditions, misrepresentation and fraud, and not meeting the policy definitions.
By product category 3% of all life claims, 11.9% of critical illness, 19.8% of income protection and 14.2% of personal sick pay claims made last year were not paid out.
Smoking, alcohol and BMI accounted for the top three reasons for misrepresentation or fraud among claimants.
Highest ever amount paid
Anna Rogers, head of underwriting and claims at LV=, said: “I’m proud that in 2022 LV= paid out £127m in protection claims; it’s the highest-ever amount we have paid for protection claims.
“Almost 8,000 individuals were supported by an LV= protection policy – and that’s not counting the numerous families and loved ones who a protection policy has also supported.
“Protection insurance has an important role to play helping people improve their financial resilience and ensure that an injury or illness does not become a financial disaster for families.
“Our help does not start and end with a claim payment. Having a policy with LV= is more than an insurance pay out. For example, the LV=Doctors Services provides valuable support throughout the life of the policy and members also benefit from our mutuality with support via our Legal Advice Line and Member Support Fund.”