LV=, the life and pensions mutual insurer, paid out individual protection claims amounting to £135m in 2023, marking a 6% increase since 2022 according to its latest claims data. The company supported over 8,000 claimants and their families, successfully paying 94% of all individual protection claims, including life, critical illness, and income protection.
Detailed in the LV= Claims Report 2023, the insurer disbursed more than £27m in critical illness claims to over 370 individuals and families, with the highest payment exceeding £600,000. Cancer was the most significant cause of critical illness claims, accounting for 59% of the total, followed by heart attack (10%) and stroke (5%). The report also highlighted payments of over £605,000 for 25 children’s claims, predominantly for cancer, with the youngest claimant being just one day old.
Life insurance claims, including terminal illness claims, totalled more than £87m, aiding approximately 5,500 families. The highest single claim payment was £2m, with cancer (36%) and heart-related conditions (23%) being the top causes for claims.
Income Protection (IP) claims approached £17.2m, helping more than 1,100 individuals and families. The leading reasons for these claims were musculoskeletal issues (33%), cancer (23%), and mental health concerns (15%). The average duration for an income protection claim was five years and ten months.
Personal Sick Pay protection claims, tailored for those in higher-risk occupations and the self-employed, totalled nearly £4m, supporting over 1,100 claimants. Musculoskeletal problems (45%), fractures (10%), and mental health issues (5%) were the predominant reasons for these claims.
Despite the high payout rate, 6% of LV= protection claims were not paid in 2023, with the majority of these due to misrepresentation or fraud, often related to failing to accurately disclose medical conditions, alcohol consumption, or smoking status.
Anna Rogers, head of underwriting and claims at LV=, commented on the results: “In 2023 LV= paid out £135m in protection claims which is the highest on record LV= has paid out for protection claims. More than 8,000 individuals and their families have benefited from having an LV= protection policy in place, and we’re proud to have supported them through the difficult moments in their lives.”
Rogers further noted the educational need within the insurance industry: “We were unable to pay 6% of claims and a good proportion of these outcomes could have been avoided. Providers and advisers must work together to educate customers on the importance of full and accurate disclosures in their applications. This would help break down some of the preconceptions out there about insurance.”
