Latest claim statistics published today shows 72% of income protection claims during 2013 came from men
During 2013, Aviva paid income protection claims to 1,462 policyholders, totalling 12.9 million. The most common reason for a claim during 2013 was mental health conditions, which accounted for nearly a third (31% of claims) of all claims. This was followed by musculoskeletal and neurological conditions, each accounting for 19% of claims, while rheumatological conditions (9%) and cancer (8%) also led to a significant number of claims.
Figures released today also show Aviva’s average income protection claim is in force for nine years and four months. Aviva took the opportunity to raise concerns that fewer than one in 10 families have income protection in place in case of a loss of income through accident or illness. When you consider 960,000 workers have absences classed as ‘long-term’ each year, families could come under severe financial pressure if the household income was to significantly reduce, or even stop.
Aviva individual income protection data also shows that in 2013:
- Payments were made to 1,462 customers.
- Almost three quarters (72%) of claims came from men.
- The average age of claimant at the point of incapacity was 44 overall. This breaks down as 45 for males and 42 for females.
- The proportion of claims paid in 2013 was 92.8%.
- Of the 7.2% claims declined overall, the majority (6% of all claims) did not meet policy criteria, while 1.2% were declined for misrepresentation.
Robert Morrison, chief underwriter for Aviva says: “It’s staggering to think that almost a million people in the UK are on long term absence from work due to illness or accident. Some of these people may have had some financial support from their employer, but often there are restrictions on how long employers will pay workers who are off sick. Meanwhile, many self-employed people are unlikely to have had this kind of cushion. This can mean that people are left to rely on their own resources, or turn to state benefits, which usually pay less than their original income.
“Given that our average income protection claimant receives payments for more than nine years, this shows just what a lifeline protection can be. We’d encourage everyone – particularly workers with dependent families – to look at what employee benefits they might receive if they were unable to work due to illness or injury. That way people can be sure what to expect and then potentially take steps to secure their family’s financial future”.
It is staggering that insurers cannot seem to persuade more consumers to buy income protection. The UK insurance industry doesn’t make selling these types of policies easy. Take life insurance. Life insurance is cheap and affordable and guarantees to pay out a lump sum if you die. Payout figures can be as high as 100%, making it a simple, straightforward product with claim statistics around 99%.
Sales of life insurance are significantly higher than income protection (IP) polices, making us a nation that protects when we are gone but not whilst we are here. I blame the insurers for making critical illness and income protection policies so dam confusing, with various levels of cover – from useless to superior – its no wonder consumers cannot be bothered.
If insurers could get IP payouts up to around the 99%, and simplify the policies and make them affordable, maybe, just maybe they would see the number of policies sold increase significantly.