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Payouts for bereavement, illness and injury claims reach £18.6m per day

Around £18.6 million was paid out per day final year usually for bereavement, illness, and injury claims, business figures reveal.

A file £6.8 billion was paid out in particular person and group life insurance coverage, revenue safety and vital illness claims in 2021, with a bounce within the worth of Covid-19-related payouts.

The figures had been launched by the Association of British Insurers (ABI) and Group Risk Development (GRiD).

The bumper enhance in particular person safety claims occurred regardless of a 1.6% drop within the complete variety of new claims paid. This is because of extra particular person time period assurance and vital illness claims, which have excessive values.

The common declare fee for time period assurance was £61,944 and £67,500 for vital illness.

Term life insurance coverage will cover the policyholder for a specified variety of years, often till retirement age. This coverage pays a lump sum, generally used to cover excellent mortgage funds, if the policyholder dies unexpectedly or prematurely.

Critical illness cover pays out a lump sum, or ongoing funds, when the policyholder is identified with a specified illness. Cancer is the commonest explanation for a declare.

The complete worth of Covid-19-related particular person claims almost doubled in 2021, leaping to £261 million, regardless of the variety of claims paid remaining regular in contrast with 2020. This was attributable to a rise in high-value time period assurance claims.

There was a rise in particular person revenue safety claims for musculoskeletal circumstances final year.

The enhance has partly been linked to extra folks working from residence, with unsuitable working environments and tools resulting in again issues, the ABI stated.

The position of insurance coverage as a monetary security web is arguably extra necessary now than ever earlier than

Roshani Hill, ABI

There had been almost 20% fewer psychological well being claims beneath particular person revenue safety in 2021 in contrast with 2020, though ranges stay larger than in 2019, suggesting that the pandemic continues to have an effect on the UK’s psychological well being.

Income safety insurance policies fill revenue gaps when an individual is unable to work attributable to illness or injury. It will often cover a proportion of the policyholder’s wage and will typically present assist companies to assist staff again into work.

Roshani Hill, assistant director, head of safety and well being on the ABI stated: “Experiencing loss, injury or illness can be a deeply distressing time.

“Coupled with the backdrop of a global pandemic and financial uncertainty with the cost-of-living crisis, the role of insurance as a financial safety net is arguably more important now than ever before.

“Payouts for Covid-19 related claims almost doubling in 2021 is a stark reminder of the devastating impact the pandemic has had on society and people’s lives.

“Although nothing will ease the distress of loss, protection insurance is there to reduce some of the financial risks and stresses that can accompany these difficult and unpredictable events.”

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