Karen Evans, Policy Adviser, Protection, ABIMillions of people every year are affected by serious illness, injury or the death of a loved one, things we prefer to think will never happen to us. Insurance can offer financial protection to relieve the stress and worry that you or your family won’t have enough money to get through a difficult time.
ABI figures for 2014 published today show that insurers pay out on average £9.4m every day to help more than 350 families cope with the financial difficulties that can result from a life changing event - allowing people to focus on other challenges.
There are some myths about protection insurance which the industry is keen to dispel by highlighting the valuable role protection insurance can play, trying to increase consumer confidence in these products. One of the myths is that protection insurance does not pay out when you make a claim. This is why each year the ABI publishes claim rates for protection insurance. In fact in 2014 97.7% of all protection insurance claims were paid (excluding group income protection) helping hundreds of thousands of families with a financial boost at a difficult time.
Insurers are in the business to pay claims so we are pleased to see a continuing increase in the claims paid out and fall in those declined. This shows industry initiatives such as the ABI’s Statement of Best Practice have helped people to better understand what they are covered for and improve the language used so that policies work better for customers.
But protection insurance does not just offer financial help when you make a claim, it can also provide additional services and support. Income protection, for example, supports people with their return to work after an illness or injury, through rehabilitation and back to work support services. In fact, group income protection can help prevent people needing to leave work in the first place through absence management systems and employee assistance programmes.
Despite the clear value of these protection policies, many households still have no real financial safety net. It’s important that the industry continues to combat the myths associated with protection insurance, and improves customer perceptions about the products in order to help more families through difficult times.
Karen Evans is Policy Adviser, Protection at the Association of British Insurers (ABI).