Record £632m paid out by Royal London in claims
Royal London paid out 99.5 per cent of all protection claims last year.
In total payouts were worth £632m, a new record high for the mutual insurer, accounting for more than 84,000 claims.
Around 96 per cent of term life insurance claims were paid out, at an average value of almost £80,000, while 99.9 per cent of whole of life assurance policies were paid out, at an average value of £3,906.
In total more than £174m was paid out in life insurance and terminal illness cover over 2021.
The insurer paid out 91.7 per cent of critical illness claims, totalling more than £136m, with an average payout above £70,000. According to Royal London, most of the claims which were declined were due to not meeting the policy definition.
A little over 90 per cent of income protection claims were paid out, including those already in payment, dropping to 82.4 per cent of new claims. Royal London said the most common reasons for an income protection claim were musculo-skeletal issues (36 per cent), cancer (16 per cent) and mental health disorders (10 per cent).
Almost £25m was paid out in claims related to Covid-19, doubling the amount paid in 2020. Around one in 10 Covid-related claims were for life insurance policies, while nearly £69,000 was paid out in income protection claims to those unable to work due to contracting the virus.
More than 700 policyholders made use of Royal London’s Helping Hand service, which offers tailored support and access to a dedicated nurse for customers and their families. The top reasons for referrals were bereavement (23 per cent), cancer (16 per cent), mental health (15 per cent) and orthopaedic issues (15 per cent).
Craig Paterson, chief underwriter at Royal London, said that the dramatic increase in Covid-related payouts “demonstrated our support as a provider over the past two years”.
He continued: “In addition to paying claims for Covid, our customers are also able to get support through Royal London’s Helping Hand service, such as help with bereavement, mental health, and returning to work after illness or injury. 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.”
The Royal London figures follow data from the Association of British Insurers which revealed that 98 per cent of both individual and group life insurance, income protection and critical illness claims were paid out across the protection industry in 2021.