You are here: Home - Insurance - News -

Insurers pay £200m in Covid-related death claims

0
Written by: Emma Lunn
18/03/2021
The equivalent of just over £550,000 a day was paid in coronavirus death claims in 2020 according to figures from the Association of British Insurers (ABI).

Pay-outs included £250,000 made the day after notification of a death, and a £1m payment to dependants.

This is the first time that ABI has collected life insurance pay-outs arising from a single event, reflecting the enormity of the pandemic.

According to the ABI, 11,198 claims were received under individual and group life insurance policies in 2020.

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 a total of £202m paid, £128m relates to individual policies, with £73m paid under group schemes. The average payout on individual policies was £13,100; for group polices it was £74,600.

In addition, £2.4m 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.

Across all insurance products, including business interruption and travel insurance, ABI members expect to pay up to £2.5b for Covid-19 insurance claims incurred in 2020.

Case studies

  • A death claim for £250,000 on a life insurance policy was paid one day after notification of the death.
  • A claim under a policy to cover mortgage payments, led to £91,000 being paid within two days of notification.
  • One particularly large death claim led to £1m being paid to the deceased’s dependants.
  • A hospital nurse, diagnosed with Covid-19, was left with permanent neurological deficit with severe memory problems. She received a payout of £144,900 on a critical illness policy.
  • A policyholder who contracted Covid-19 in March last year was still suffering severe fatigue in June. They claimed on their income protection policy and is receiving a monthly benefit to replace lost income. The insurer also provided a fatigue management programme specifically designed for people suffering from long Covid.

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.”

 

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

It’s time to get your finances in shape, and moving your cash savings to a higher paying deal is a good plac...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week