Last month it was reported in a regional newspaper that one of the UK’s largest insurance companies had refused to pay out on a life insurance policy, continue reading to find out why I find it stupid, ill-conceived and irresponsible for any newspaper to print such a story.
I’m aware a great number of you will criticise my use of the word ‘stupid’, however, let me explain my thoughts.
In a recent article in Cover magazine, it stated the research by a well-known UK protection provider indicated that 10 million young UK adults were without life insurance. Of the two thousand 18 – 40-year-olds surveyed 28% said they never thought about life insurance, 27% said they couldn’t afford it and 20% stated the cost-of-living crisis as the reason they were not covered.
It is estimated the impact of a death of a family breadwinner being £195,000 over ten years. A spokesperson for the provider said, "What we're seeing is a generation of adults without life insurance and we know from speaking to our customers that this includes people from a range of backgrounds, including young families with children.
When you consider that the age group 18-40 years old is most likely to have young children, most likely to rent, most likely to have a mortgage, most likely to have little or no savings. They are, however, most likely to read the headline of a regional newspaper that has gone viral across all of the social media platforms and truly believe there is very little point in having any kind of protection as ‘Insurance companies never pay out’
Now, let’s look at some of the figures:
According to the latest figures from the Association of British Insurers (ABI) Individual policies paid out 287,000 life insurance, income protection and critical illness claims in 2022, totalling £4.64 billion. The average pay-out from these policies increased for the third year in a row, from £14,931 to £15,448 an increase of 9%.
Over 15,900 people claimed against their individual income protection policies in 2022, a 9% increase from the previous year. The total value of claims also increased by 22%, with £231 million paid to people who were unable to work.
Claims for musculoskeletal issues such as neck and back pain were the main cause for an individual income protection claim, accounting for 34%. This is the second year in a row that musculoskeletal issues have been the leading cause of claims.
Claims acceptance rates remains at around 98%.
The number of new individual claims paid has remained consistent at around 98% since 2017. In more than half of the declined claims, customers had not told their insurer key details about themselves or their circumstances when they took out the policy.
In conclusion, research shows most either go to a comparison site like Comparison Wizard, or they speak to a financial adviser.
TLD wealth Management can give advice on protection insurance, and we are very good at it, and our principle TPD Wealth Management hold Charted Financial Planner status which places them with the very best in the UK.
Don’t leave your future to chance call us on 0161 814 9315 and book an appointment to protect what matters most.
All figures quoted are from Cover magazine and the ABI.