Death is often referred to as ‘the last taboo’ but recently British attitudes towards death have begun to change. As a nation we are more willing to talk about our own mortality and we are more willing to make financial plans for an uncertain future. A report by the Association of British Insurers (ABI) has revealed that insurers paid out nearly 25,000 life insurance claims last year with average payouts topping £26,000.
Life insurance is just one type of cover that falls under a wider umbrella of ‘protection insurance’, which is designed to safeguard against financial hardship due to illness, injury and bereavement. Add up all the different types of protection insurance and the industry paid out nearly £3.5billion to over 128, 000 families in 2014. It’s a significant increase on the previous years’ figures and points to the fact that more families are planning for the future.
Put another way that’s 350 payouts totalling £9.4million every day, and what’s more the figures revealed that 97.9% of claims were successful. Dig a little deeper into the report and the findings make interesting reading:
Life Insurance Provides a cash lump sum if the policyholder dies during the term of the policy (Term Life Insurance - where payouts averaged £60,000 and totalled £1.5billion) or on death (Whole Life Insurance - where payouts averaged nearly £7,500 and totalled £540million)
Critical Illness Insurance Insurers paid out over 15,000 claims averaging £67,000 to policyholders who were forced to give-up work due to serious illness such as a heart attack or stroke.
Total Permanent Disability 450 claims averaging £73,000 were made to policyholders unable to work due to permanent disability.
Income Protection Insurance Average claims totalled £39,000 providing regular income over an average period of 204 weeks.
To help make sense of the figures it’s worth remembering that every year more than a million people find themselves unable to work for a month or longer due to illness or injury.
The figures show that protection insurance can a make a significant difference to families dealing with life changing events, and cover is more affordable than you might think.