Part of my job as a financial planner is catastrophe planning. Are you and your family protected against premature death or the loss of the ability to earn an income. Insuring this risk is the simplest way of negating this risk. I occasionally talk to people who are sceptical about cover, believing that insurance companies will do their utmost not to pay out. That’s just pub talk. Insurance companies have professional claims departments and insurance companies issue their claims statistics each year. Aviva and New Ireland issued their claims statistics recently and Friends First issued their income protection cover claims. It makes for interesting reading and you can see that they do pay out in the vast majority of cases.
Aviva paid out almost €10m in specified illness claims in 2016.
102 claims were paid out in 2016. Just 8% of all claims were declined. Of those claims that were denied, 44.4% were where the definition was not satisfied, 33.3% was for where the condition wasn’t covered and 22.3% was for non-disclosure.
Nearly 2/3rds of all claims were for cancer and heart attacks accounted for almost 20% of all claims with Avvia.
New Ireland paid out €26.3m in specified illness claims in 2016.
360 claims were paid out in 2016 and 12% of all claims were denied. Of those claims that were denied, 69% were where the definition was not satisfied, 15% was for where the condition wasn’t covered and 16% was for non-disclosure.
Cancer was the cause of death in 61% of all claims paid and heart attacks accounted for 11% of all claims with New Ireland.
Aviva paid out €496,000 in income protection benefits in 2016.
25 new claims were paid out in 2016. Just 3% of all claims were declined.
Nearly 2/3rds of all claims were for musculoskeletal issues, 13.6% for mental health, 13.6% for neurological issues and just 4.5% for cancer.
New Ireland paid out €10.1mm in income protection claims in 2016.
678 claims were paid out in 2016 and 6% of all claims were denied. The claims declined were because New Ireland’s assessment deemed the claimants medically fit to work.
30% of all claims were for musculoskeletal issues, 30% for mental health, 4% for neurological issues and 19% for cancer.
Friends First paid out €33m in income protection claims in 2016.
1,450 claims were paid out in 2016 and 10% of all claims were denied.
28% of all claims were for musculoskeletal issues, 24% for mental health, 12% for neurological issues and 14% for cancer.
You can see from the statistics that in the vast majority of cases, a claim is accepted. In the cases of specified illness and especially income protection, the underwriting process is very thorough as the application stage so there are no issues if a claim is made.
It is also interesting to see that while cancer and heart attacks are the main reasons for pay outs for life cover and specified illness, they are not the biggest reasons for pay out for income protection, bad back, stress and mental illness as well as diseases of the brain are.
If you have any questions in relation to the above, contact me directly at steven@bluewaterfp.ie
