Insurer paid 99.7% of claims in 2019 totalling more than £575m to nearly 120,000 customers
Royal London paid nearly £145m in life and terminal illness claims last year.
More than 1,300 term life insurance claims were paid, with an average pay-out of around £80,000 per claim. The average pay-out for a terminal illness claim was around £139,000 (245 paid).
More than a quarter of a billion pounds (£269m) was paid in whole of life claims. The average pay-out was around £2,300 with 115,361 claims paid in total.
Critical illness (CI)
For CI claims, Royal London paid on average nearly £74,000, with more than £150m paid out in total. Of the CI claims that were declined, Royal London said the majority did not meet the plan definition.
The most common reasons for a CI claim in 2019 were cancer (65%), heart attack (10%), stroke (6%), children's CI (5%) and multiple sclerosis (3%). Of the children's CI claims paid 53% were for cancer and 15% for open heart surgery. The average age of a CI claimant (excluding children) was 50 years old and the average age of a children's CI claimant was eight years old.
Following changes made in recent years, the insurer paid out claims for three pregnancy related complications and, tragically, the deaths of five children.
Income protection (IP)
For IP, £3.3m was paid out in 2019. A total of 257 new claims were paid in 2019, with the most common reasons for IP claims being musculoskeletal (43%), cancer (17%) and mental health (12%). The average age of an IP claimant was 40 years old.
After recently adding hospitalisation cover to its income protection plan, there were five claims paid in 2019.
Of all protection claims received 0.3% were not paid out due to misrepresentation (0.1%) and not meeting the policy definition (0.2%), Royal London said.
According to the insurer, claims declined due to misrepresentation means the customer did not answer the application questions accurately to the extent that, had the full and correct information been known, cover would not have been offered, or an exclusion would have applied for the condition that the customer was claiming for.
Craig Paterson, interim chief underwriter at Royal London, said: "Last year we paid 99.7% of claims, but we continue to focus on improving our proposition so that we can continue to pay such a high level of claims. Cancer continues to be the most common reason for a critical illness claim and with it being the single biggest risk we all face, it's important to have comprehensive cover in place. That's why earlier this year we made improvements to our critical illness and children's critical illness cover available through our menu plans. And in 2019 we paid out for claims on product features we've introduced in previous years such as pregnancy related complications and hospitalisation cover.
Paterson added: "Receiving a payout can help to ease the financial strain of bereavement or falling seriously ill, however money can't always ease the emotional strain. Our Helping Hand service offered through all of our protection policies is available to all customers and their families, so they can receive emotional support they need."
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