Royal London paid out a record £591m in protection claims last year with £13m paid to families who had experienced a death due to Covid-19.
The mutual insurer revealed it paid 99.6% of all protection claims – 235 claims on average per day in 2020, helping around 86,000 of its customers.
The group paid out more than £4.1m in income protection claims (IP) paid at an average of around £5,500 per claim with fewer than 7% not paid due to misrepresentation or a claim not meeting the plan definition. The average age of IP claimants was 40.
Almost a third of a billion (£314m) was paid out in whole of life claims with 99.9% of claims paid with an average pay out for the year of £3,820, up 48% from 2019.
Royal London paid 92.4% of critical illness (CI) claims with an average of more than £73,000 and more than £133m paid in total.
Of those CI claims that were declined, most did not meet the plan definition. The most common reasons for a CI claim in 2020 were cancer (63%), heart attack (12%) and stroke (7%).
More than £136m was paid in life and terminal illness claims. Nearly 1,500 term life insurance claims were paid (95.7%), an increase from 2019, with an average of £73,000 per claim.
While, terminal illness claims paid totalled more than £30m with an average payout of £135,000.
Helping Hand support
More than 600 people benefited from Helping Hand, the group’s service which offers tailored support and access to a dedicated nurse for customers and their families. The top reasons for referrals to the service were bereavement (26%), cancer (18%), mental health (15%) and orthopaedic (15%).
However, 55 of the referrals were for children, with the most common condition being mental health (29%). The average duration of support for children with mental health conditions was four months.
Of all protection claims received 0.4% were not paid due to either misrepresentation or the claim not meeting the policy definition – both at 0.2% of the total.
Commenting on the data, Craig Paterson, chief underwriter at Royal London, said: “Last year we paid £591m in protection claims, a record figure for Royal London.
“We recognise that it has been a challenging year in many ways, and the pandemic has had a devastating impact on many families. In 2020, we paid out more than £13m to families who had experienced a death due to Covid-19.
“In addition to paying claims for Covid-19, customers are also able to get support through Royal London’s Helping Hand service. Customers and their families can receive access to the support of a dedicated nurse with tailored and personal support whenever it’s needed, for as long as it’s needed.
“Receiving a pay out can help to ease the financial strain of bereavement or falling seriously ill, but our Helping Hand service offered through all of our protection policies can help to ease the emotional strain.”