Posted 7 Apr 2021

Covid life insurance claims hit £202million in 2020

Recent figures from the Association of British Insurers (ABI) show that just over £200million was paid out in 2020.

Tragically over 74,000 people lost their lives in 2020 in the UK because of Covid-19.

The life insurance industry has been brought into the spotlight recently due to dramatically increased claims from Covid related deaths.

It is suggested that there were just over 10,000 claims on individual life insurance policies and over £550,000 per day was paid out.

Life insurance has always been the most reliable way to protect your family’s financial future should anything happen. Covid has highlighted the importance of proper financial protection and what could happen if nothing is in place.

When we think about Covid-19, we generally think about vulnerable people living with pre-existing medical conditions.

The life insurance industry now needs to do more to help protect those people in the future and their families. Covid has helped to remind us of how fragile we can be and what could potentially happen in extreme situations such as this.

Headline life insurance figures for Covid-19 in 2020

Total amount of life insurance claims paid out for Covid related deaths in 2020 for individual and group policies£202 million
Total number of claims received in 2020 for individual and group life insuranceTotal: 11,198 (Individual claims: 10,205 / Group: 993 claims)
Average claim payment for individual and group life coverIndividual: £13,100
Group: £74,600
Total amount of claims paid out to customers due to Covid-19 across all insurance services (including travel insurance and business interruption)£2.5 billion

 

Life insurance provider claims statistics from Covid-19 in 2020

Some of the top insurance providers have also released figures to show how they were able to help customers during the pandemic.

Below are just a few examples from several of the leading life insurance brands and our key partners.

Aegon life insurance claims statistics 2020

One of the oldest and most established life insurance brands in the UK, Aegon (previously Scottish Equitable), records £140million paid out in 2020.

Aegon paid out on a total of 1,584 claims during 2020 which was an increase of 17% on the previous year.

Aegon claims figures 2020

Life insurance claims paid out in 2020 for individual and business protection£81.3million (803 claims)
Top 3 causes of death recorded for life insurance claimsCancer – 40%
Heart conditions – 21%
Respiratory diseases – 14%
Average payout per claim for life insurance and the average age of the claimantAverage claim: £100,751
Average age: 63 years old
Percentage of claims where Covid-19 was recorded as the cause of death12%

 

Aegon also noted that claims paid out under critical illness cover policies reduced fell by 14% in 2019. This is due to the problems that people were experiencing in being able to access medical treatments and diagnosis through the NHS.

Aviva life insurance claims statistics 2020

As one of the UK’s biggest insurance brands, Aviva recorded some of the highest claims figures of all insurers.

According to Aviva up to the end of September 2020, it paid out over £36million to customers from nearly 1,700 individual Covid related claims.

Aviva also reported that there was a worrying reduction in the level of claims from critical illness cover, down by 20% in 2019.

LV= life insurance claims statistics 2020

As a life insurance provider, LV= paid out over £12million in Covid related claims for life insurance, critical illness cover, and income protection.

The insurer LV= is most well-known for its award-winning car insurance and income protection cover.

LV= claims figure 2020

Total claims paid out in 2020 for life insurance, critical illness cover, and income protectionTotal: £118million
Life insurance: £72million
Critical illness cover: £28million
Income protection: £14.6million
The overall percentage of claims paid out in 2020 by LV=95%
Top 3 causes of death recorded for life insurance claims in 2020Cancer: 43%
Heart conditions: 17%
Covid-19: 11%
Top 3 causes of death recorded on critical illness cover claims in 2020Cancer: 60%
Heart attack: 10%
Stroke: 8%

 

The total number of claims paid out in 2020 caused by Covid-19 related problems was £6.5million (figures included 619 death claims and 255 income-related claims).

Daniel Sharpe-Szunko
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