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New analysis published by Zurich in the UK shows over £222m was paid out in the first half of 2021 to customers who made claims on their life, critical illness, and income protection policies. This represents a 75% increase in the number of claims paid over the same period last year, as the insurer supports individuals and their families during and following illness and fallout from the pandemic.
For critical illness policy customers, 91% of claims were paid, valued at more than £50.7m. Payments have increased by nearly 20% on those issued during H1 in 2020. Early indications suggest that claims delayed last year are filtering through as we start to return to pre-pandemic levels as people access medical help for serious conditions.
The main causes of claims were cancer accounting for 41%, heart attack (8%), stroke (4%) and MS (3%). Breast cancer alone accounted for 14% of claims with the average age of claimants being just 32.
Drop in early-stage breast cancer claims
Historically, policies with an ‘additional payments’ feature, have benefited customers with illnesses such as early-stage cancer. Worryingly, claims from customers with this policy benefit dropped by more than two thirds (69%) on the same period last year, when the majority were from women with either breast cancer or brain aneurisms. This decrease may reflect the fact that fewer women are seeking or able to receive medical screenings because of the additional burden currently faced by the NHS. According to Cancer Research UK, around 38,000 fewer women started treatment for the disease in 2020-21.
Income protection claims were also down by 12% on H1 2020 with over £2.9 m paid out to customers unable to work through illness or injury. The vast majority (99%) of new claims were paid. A quarter were for cancer and musculoskeletal problems (25%) and more than one in five (21%) were for mental illness.
Life insurance and Covid
More than £167.8m was paid to life insurance customers representing a 99% pay out rate, and of these £18.1m was Covid related.
Over £568K was paid out to customers with ‘multi fracture cover’, with payments up by 24% on the same period last year. The rise reflects lockdown restrictions easing and people enjoying more leisure activities. Claims are caused from anything from slip and trips through to cycling accidents. Most of these have no long-term effects, but customers have used the money to cover their bills if they’ve been unable to work for a few weeks, or, for example, for taxis if they’ve been unable to drive or use public transport.
During H1 many life insurance policy holders benefitted from Zurich Support Services with most users accessing clinical support including free therapy and counselling. The service offers help ranging from counselling through to lifestyle advice on matters including money management and sourcing child or elder care.
Why 3% of claims were declined
Across all products, just 3% of claims were declined for either misrepresentation, or as the severity definition of the illness set out in their policy was not met. Misrepresentation occurs where the customer hasn’t told us about previous medical history or lifestyle factors.
For example, one customer’s claim was declined during H1 as she had applied for a policy without sharing details of symptoms and investigations already underway for cancer. A recent example where the severity definition of the policy was not met, involved a claim for stroke. This was declined as the customer had not suffered any permanent neurological damage and all symptoms had been resolved.
Louise Colley, Director of Zurich’s Retail Protection business said: “While claims are never good news for our customers, we are reassured to see claims coming through, particularly from critical illness customers. These products offer our customers the peace of mind and support that they need at such a difficult time in their lives.
“More worrying, is the drop we’ve seen in claims for things like early-stage breast cancer – and for this we would urge people to press ahead with getting any worries checked out so that early treatment and support can be accessed. Similarly, we’d also encourage them to utilise extra support services through their cover, like ours, where they can access free counselling and other wellbeing support.”