Zurich pays 93 per cent of income protection claims during 2014
Today, 23rd February 2015, insurer Zurich published its latest income protection claims statistics. Zurich paid out over £11.8m in income protection policy payments during 2014, to 687 policyholders who were unable to work because of long term sickness, injury or disability.
This amount is part of a total of £191m paid by the insurer in protection related claims last year, including £63.1m for critical illness and £116m for life claims.
Of the 687 income protection customers receiving payments in 2014, 69 were new claims and 93% of these were successful. Just 7% or 5 claims in total were declined because the policy’s criteria were not met. I wish insurers would expand on “policy criteria” not being met. Nowhere in Zurich’s press release does it expand on the reasons it refused claims.
To be fair there are genuine reasons why these five claims could have been refused. Premiums could have been in arrears, the policyholders could have been unemployed, therefore having no income to protect. Finally, these policyholders could have purchased work task / activities of daily living definition based policies, which would in the vast majority of cases would have failed to pay out.
The average monthly payment per customer last year was £1,524, while the top four reasons for new claims were cancer (12 claims), mental illness (12 claims); musculoskeletal including spinal disorders (20 claims), and neurological conditions (10 claims). These figures just go to show the how big a difference monthly payments from income protection insurance can make to consumers in their hour of need.
Peter Hamilton, Head of Retail Propositions said: “We hope that these statistics reassure and remind people how invaluable income protection cover is. As well as the financial benefits paid out to customers, the rehabilitation element of the product that can help people back to work, such as counselling or physiotherapy, is often overlooked
“Recent research* suggests that while one in four of us has pet insurance, only one in fourteen have income protection, which is barking mad. This has serious repercussions not just for individuals, but for employers and the Government which is why we have recommended tax incentives for individuals and for employers who provide cover.”
Zurich, who are supporting the successful Seven Families initiative latest payout figures are around the average for the industry. Hopefully, 2015 will see payouts increase as it would be nice to see claim stats in the region of 98 per cent.