Insurance giant Zurich pays out 100% of income protection claims in first half of 2014
Miracles can happen in the protection industry. I always knew it was possible to have income protection (IP) claims statistics matching life claims around the 99-100% mark. If the industry could only sort out their policies and drop useless definitions, the claims they paid could only increase, but to see Zurich reach the magic figure of 100% of claims paid leaves insurers paying 88% of IP claims left miles behind.
Zurich also shows the massive difference between insurers and policies. We can only applaud Zurich for paying every claim put to them by policyholders and lets hope this gives a giant kick up the arse and wake up call to other insurers to follow suit.
In the first half of 2014, Zurich accepted 100 per cent of income protection claims, paying out £6.2m of benefit with an average monthly benefit of £1,217. Compare Zurich’s latest figures to last year (94 per cent of income protection claims paid in 2013), and this means the insurer has paid around an extra £600,000 in claims that would have been refused when policyholders made a claim.
Income protection is a product that protects you whilst you are alive, giving you much needed monthly income to help pay the bills whilst you recover from an illness or injury. Insurers are known rightly or wrongly for digging through medical histories of policyholders to find excuses for not paying out through non-disclosure.
Remember the refused claims for non-disclosure by insurers such a Scottish Provident? Inga McVicar’s claim was refused because she had failed to declare an earlier ear infection even though her claim was made after she was diagnosed with ovarian cancer in October 2007.
By changing their whole approach to income protection – new rules for non-disclosure, better definitions, better claims handling – all increase the likelihood that claims will be paid. Lets hope this is the start of a change within the income protection industry and other insurers follow suit.