- The equivalent of just over £550,000 a day was paid in Coronavirus death claims in 2020 according to the latest ABI figures.
- One claim for £250,000 paid the day after death notification received.
Insurers paid out £202 million – the equivalent of £553,000 every day - to support the families of people who tragically died due to COVID-19 in 2020 according to figures issued today by the ABI. Payouts included £250,000 made the day after notification of death, and a £1 million payment to dependants.
This is the first time that ABI has collected life insurance payouts arising from a single event, reflecting the unprecedented pandemic. These figures compare to the £5.8 billion paid out for all protection claims in the previous year, 2019.
The figures highlight that in 2020:
- 11,198 claims were received under individual and group life insurance policies. Of these, 10,205 were individual policies (whole life, term insurance and critical illness claims) with 993 on group life insurance schemes.
- The vast majority of these claims – 96% for individual and 99% for group - have been paid. The remaining valid claims are being processed as quickly as possible.
- Of the total £202 million paid, £128 million relates to individual policies, with £73 million paid under group schemes.
- The average payout on individual policies was £13,100; for group polices it was £74,600.
- In addition, £2.4 million has so far been paid from 968 claims made under individual and group income protection insurance, so helping those who suffer a loss of income due to Covid illness.
Case studies of how insurers are helping Covid victims
- Life insurance. A death claim for £250,000 was paid one day after notification of the death. Another claim under a policy to cover mortgage payments, led to £91,000 being paid within 2 days of notification. One particularly large death claim led to £1 million being paid to the deceased’s dependants.
- Critical Illness. a hospital nurse, diagnosed with COVID-19 which deteriorated was left with Permanent Neurological deficit with severe memory problems, received a payout of £144,900, on a critical illness policy.
- Income protection. A policyholder who contracted COVID-19 in March last year was suffering severe fatigue in June. The insurer continues to support their customer, paying a monthly benefit to replace lost income and providing a fatigue management programme specifically designed for people suffering the long-term effects of COVID-19. This customer has just started a phased return to work.
Across all insurance products, including business interruption and travel insurance, ABI members expect to pay up to £2.5 billion for COVID-19 insurance claims incurred in 2020.
Yvonne Braun, the ABI’s Director of Long-Term Savings and Protection, said:
“No one will have been affected by the pandemic more than the families of those who have tragically died due to Covid. While no amount of money can ever replace a life, insurers have and continue to do everything they possibly can to help families cope financially through these distressing and worrying times.”
In addition, the UK insurance and long-term savings industry is helping support some of the people hardest hit by the pandemic. Launched in May 2020, the Covid-19 Support Fund has raised over £100 million to help charities affected by Covid-19, providing both immediate help and putting in place a longer-term programme of support for people, communities, and issues where there is the greatest need.
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Notes to Editors:
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