23rd February 2011
LV= announces rise in critical illness and income protection payouts in 2010
- 93.5% of critical illness claims paid, up from 90% in 2009
- 92% of income protection claims paid, up from 90% in 2009
- Publication of statistics encourages greater trust
- Call for more providers to publish income protection claims stats
Protection specialist LV= has today published its 2010 protection claims record, which shows an increase in claims paid on both critical illness and income protection policies. 93.5% of all critical illness claims, and 92% of income protection claims were paid in 2010, both up from 90% of claims paid in 2009.
The amount LV= paid in claims also increased in 2010, paying over £9m in critical illness claims (£7.9m in 2009), and more than £12m in income protection claims (£11.9m in 2009). Over the years, LV= has maintained a consistent track record of paying protection claims with a steady upward trend in the number of claims accepted. LV= is one of only a few providers to publish its income protection claims data.
2010 protection claims data from LV= also reveals:
- The most common reasons for critical illness claims were cancer (63%) followed by heart attacks (12%)
- The average payout on a critical illness policy was £74,511
- The top causes of income protection claims were mental disorders (30%), and musculo-skeletal disorders (20%)
- The average annual benefit for income protection claims was £15,596, with an average seven year payout.
Mark Jones, LV= head of protection, said: “Our consistently high and improving claims payment illustrates our firm commitment to support people in their time of need, and to limit the risk of any concern at the point of applying for a policy. This success is in part down to the investment in our tele-interviewing service, intelligent underwriting, and exploring the reasons for non-disclosure rejections in past years and putting measures in place to reduce them.
“When people make a claim on a protection policy, it is often at an extremely difficult time in their life. As such it is absolutely vital that we are a provider that can be trusted, not just to pay claims, but also to treat claimants in a caring and professional manner.
“Our transparency in publishing protection claims statistics reflects our policy of openness. We want to make sure that advisers and consumers alike are fully aware of why claims can be rejected, so that we can all play a part in keeping rejections to a minimum.”
Matt Morris, senior policy adviser at protection intermediary LifeSearch, comments: “These are excellent paid claims figures from LV=. It is particularly pleasing to see the income protection stats included as not every insurer publishes these figures, although they should do for the sake of transparency in the eyes of the consumer.”
LV= has produced separate guides detailing its income protection and critical illness claims performance for 2010.These guides are designed for financial advisers to use with their clients to help them understand why it is important to disclose full information when they apply for a policy. The guides also demonstrate the ‘more than just a cheque’ benefits from LV=, which include the Extra Care claim support service.
Also detailed in the guides are examples of claims LV= has paid out during 2010, bringing to life actual customer scenarios and showing the benefits they are now receiving from their LV= protection policies.
LV= critical illness and income protection claims data in detail:
Critical illness 2010 | Critical illness 2009 | Income protection 2010 | Income protection 2009 | |
| Total amount of claims paid out | £9,015,813 | £7,902,487 | £12,000,607 | £11,909,585 |
| Average benefit | £74,511 | £72,500 | £15,596 annually | £11,740 annually |
| Average length of claim per policy | na | na | 7 years | 8 years |
| Average age of female claimant at claim | 46 | 46 | 44 | 44 |
| Average age of male claimant at claim | 49 | 49 | 47 | 46 |
| Total claims paid | 93.5% | 90% | 91.6% | 90% |
| Declined claims - non-disclosure | 2.9% | 3% | 2.7% | 3% |
Declined claims – not meeting claim definition | 3.6% | 7% | 5.7% | 7% |
| Total declined claims | 6.5% | 10% | 8.4% | 10% |
Examples of critical illness claims paid by LV= in 2010
Critical illness diagnosis | Gender | Total benefit paid | Age |
| Multiple sclerosis | F | £500,000 | 33 |
| Brain tumour | M | £140,000 | 35 |
| Kidney failure | M | £100,000 | 38 |
| Triple coronary artery bypass graft | M | £111,665 | 43 |
| Amputation of right leg | M | £50,000 | 45 |
| Ovarian cancer | F | £51,838 | 48 |
| Stomach cancer | M | £70,521 | 53 |
| Heart attack | F | £35,998 | 54 |
| Stroke | M | £365,394 | 59 |
| Bowel cancer | F | £86,144 | 61 |
Examples of income protection claims LV= paid in 2010:
| Age at claim | Gender | Occupation | Cause of claim | When we started paying the claim | Total amount paid so far |
| 34 | M | Co Director | Multiple sclerosis | Jan 1986 | £1,446,562 |
| 39 | F | Bank clerk | ME | Mar 1991 | £476,133 |
| 41 | F | Solicitor | Depression | Jun 1990 | £471,582 |
| 42 | F | Supermarket manager | Back pain | Feb 2009 | £13,508 |
| 47 | M | Chiropractor | Tendonitis both wrists | Dec 2000 | £191,280 |
| 48 | M | Estate agent | Heart attack | Aug 1997 | £754,560 |
| 52 | M | Farmer | Lower back pain | Dec 1998 | £375,264 |
| 52 | F | Health visitor | Alzheimer's | Feb 2005 | £67,270 |
| 56 | M | Project supervisor | Stroke | Oct 2006 | £81,800 |
| 58 | M | Veterinary surgeon | Broken fibula / tibia | May 2008 | £13,423 |
For further information about LV= please go to www.LV.com/adviser
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