UK: Aviva reveals £870 million paid in individual protection claims in 2016 but research shows people fear claims won't get paid

UK adults estimate that just 47% of individual protection claims are ever paid out but their perceptions don’t match reality, with Aviva confirming it paid out 96.7% of all individual protection claims in 2016.

  • UK adults believe only 47% of individual protection claims are ever paid
  • 86% say insurers will always try to avoid paying out
  • Aviva data shows very few individual protection claims go unpaid: 96.7% of all claims across life insurance, critical illness and income protection were paid in 2016
  • £870 million or £2.4 million per day was paid out to help UK families in times of need
  • 33% of UK adults say they have not always been honest when applying for insurance
  • Pay-outs could be even higher with improved education on why claims are declined

UK adults estimate that just 47% of individual protection claims are ever paid out but their perceptions don’t match reality, with Aviva confirming it paid out 96.7% of all individual protection claims in 2016.

The insight* comes as the insurer releases its first Aviva Individual Protection Claims Report, which highlights that it paid out more than £870 million in claims last year, equating to £2.4 million every day. More than 23,000 Aviva UK customers and their families** benefitted from individual life, critical illness and income protection cover.

Aviva paid out 98.9% of life insurance claims to support families through a bereavement or terminal diagnosis, 92.3% of critical illness claims for conditions such as cancer, heart attack and stroke, and 92.6% of income protection claims to help customers get back to work after a health crisis.

As well as detailing how customers are supported through Aviva’s claims and rehabilitation process, the report also aims to raise awareness around the common reasons why a small number of claims are declined, emphasising the importance of consumers carefully checking that correct health and lifestyle information is provided during the application process and that they fully understand the policy’s terms and what it covers.

Further findings from the research support the call for more education amongst consumers to limit the possibility of any protection claim being declined: a third (33%) of people said they had not always being entirely frank with insurers when applying for different types of insurance.

More than half of UK adults (53%) also say they do not bother to read the detail on any insurance policies they purchase. A similar proportion (54%) also said they only check their insurance policies’ terms and conditions when they need to claim, increasing the possibility of disappointment if a claim is made for something that is not covered by their particular policy, such as a specific illness.

Last year Aviva declined around 140 individual protection claims due to customers’ statements about their health and lifestyle during the application not being accurate. Around 400 were declined because the condition being claimed for was not covered by the policy.

UK adults are not aware of common reasons for individual protection claims being declined

In another sign that greater education is needed to avoid claims being declined, as many as 45% of UK adults do not think that providing incorrect height or weight data during the application could lead to an individual protection claim being rejected, while 25% did not realise this was also true of their drinking and smoking history. Both factors can significantly contribute to the likelihood of developing certain illnesses, such as cancer – the most common condition for critical illness, life insurance and terminal illness benefit claims in 2016.

Other common reasons for a rejected protection claim that UK adults fail to identify are not including accurate general health information (26%) or family history of specific medical conditions or illness (31%) when applying.  

Paul Brencher, Managing Director of Individual Protection at Aviva said:

“It’s a common misconception that insurers don’t pay out on protection claims – but our report shows this simply isn’t true. In the significant majority of cases, a claim will be paid, delivering crucial financial support during what will often be the most difficult period of someone’s life.

“However, claims rates could be even higher if all consumers were aware of the need to take extra care when making an application. Incorrect information, whether deliberate or accidental, and not checking the product details are some of the main reasons why a small proportion of protection claims cannot be paid. Advisers can also help prevent this by stressing the importance of being as thorough and clear as possible when applying for insurance.

“As an industry, we must ensure the pervasive myth that insurers don’t pay out isn’t a barrier to families taking steps to protect themselves against illness or a death.”

The Aviva Individual Protection Claims Report is available to download here.

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Media enquiries:

Aviva Press Office: Melissa Loughran on 07800 691947 or Melissa.loughran@aviva.com

Aviva’s spokesperson, Paul Brencher, is available for comment/interview.

Instinctif Partners: Rachel Morrod (0207 427 1431 / 07815 541 791), Jordan Campbell (0207 427 2056 / 07581 628825) aviva@instinctif.com

Notes to editors:

* Research conducted to support the Aviva Individual Protection Claims Report was conducted by Censuswide, with 2,166 UK adults aged over 18 in Great Britian in April. The survey was conducted from a random sample of UK adults. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR.

**All data concerning claims paid in 2016 include all Aviva and Friends Life Individual Protection policies that are now managed by Aviva.

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