What are the chances of claiming on protection insurance?
When considering protection insurance, many people wonder, “What are my chances of actually making a claim?” Whether it’s life insurance, critical illness cover, or income protection, it’s natural to ask if these policies will provide the support needed when life takes an unexpected turn.
Understanding the likelihood of claiming on protection insurance can help you make informed decisions about the cover that’s right for you and your family. This blog aims to clear up common questions around claims in the UK, using clear language and real-life examples to guide you.
What is protection insurance?
Before looking at the chances of claiming, let’s briefly define protection insurance. It’s a type of policy designed to provide financial help if you face illness, injury or death. The three main types are:
Life insurance: Pays a lump sum to your loved ones if you die during the policy term.
Critical illness cover: Pays out if you are diagnosed with a serious illness covered by your policy.
Income protection: Provides a monthly income if you’re unable to work due to illness or injury.
These policies help to remove financial strain in difficult times, offering peace of mind.
How common is it to claim on protection insurance?
To understand your chances of claiming on protection insurance in the UK, it’s useful to look at how often claims happen across the main types of cover.
Life Insurance Claims
According to industry data within the UK, the majority of life insurance policies pay out eventually, but this depends heavily on the policy length and the age when the cover started.
For example, a healthy 35-year-old with a 25-year term might not claim for many years, if at all.
However, if a claim is made, it likely occurs later in the policy term.
Life insurance claims are more common in policies taken out to cover a mortgage period, ensuring families aren’t left with debt.
Critical Illness Claims
Claims for critical illness cover have become more frequent as awareness of serious health conditions grows. Common illnesses covered include heart attack, stroke, cancer, and multiple sclerosis.
Around 1 in 5 people with critical illness cover may claim during the policy term, depending on age and health at purchase.
For example, someone diagnosed with early-stage cancer that triggers a policy payout could receive a lump sum to cover treatment or living expenses.
Income Protection Claims
Income protection sees a higher number of claims compared to life and critical illness insurance because it covers temporary illness or injury impacting work.
It’s estimated that around 1 in 10 policyholders make a claim on income protection in any given year.
For example, a self-employed plumber suffering a broken leg might claim income protection to cover lost earnings during recovery.
What factors affect the chance of making a claim?
Several things influence whether you’ll need to claim on your protection insurance.
1. Your health and lifestyle when applying
Insurers assess your medical history and lifestyle habits, such as smoking, before offering cover. Good health generally means a lower chance of claiming but also lower premiums. If you have health issues, claims might become more likely.
2. The type and length of cover
Longer policies increase the chance that life events will fall within the cover period. Short-term cover, such as fixed-term life insurance for a mortgage, reduces how long you are insured but is targeted to a specific financial need.
3. Your occupation
Some jobs carry more risk than others. For example, manual workers may face higher chances of injury, potentially increasing claims on income protection.
4. Age when you take out cover
Younger people usually pay lower premiums but may not need to claim for many years. Older applicants may have a higher chance of claiming soon but face higher premiums.
Real-life examples of protection insurance claims
To put this into perspective, here are a few real-life style examples of protection insurance claim scenarios.
Example 1: Life Insurance
Sarah and Tom took out a 30-year life insurance policy when they bought their first home. Sadly, Tom passed away in year 15 due to an accident. The policy paid out a lump sum that allowed Sarah to pay off the mortgage and maintain her family’s lifestyle.
Example 2: Critical Illness Cover
David was diagnosed with a heart attack at 45. Thanks to his critical illness policy, he received a lump sum that helped cover treatment costs and allowed him to take unpaid leave from work during recovery.
Example 3: Income Protection
Emma, a graphic designer, was diagnosed with severe arthritis, making it hard to complete her daily tasks. Her income protection insurance provided monthly payments, covering her reduced earnings while she adapted.
Do most protection insurance claims get paid?
A common concern is whether insurers pay out claims once made.
The good news is that the majority of genuine claims on protection policies are paid in full, provided the application was honest and the claim meets the policy terms.
Insurers reported a claims acceptance rate of over 90% for protection insurance.
Clear communication and accurate information when applying improve the chance of a successful claim.
Keep your policy documents safe and inform your insurer promptly if you need to claim.
Should you have protection insurance?
While the chance of claiming varies for everyone, protection insurance offers important financial safeguards against the unexpected.
Consider asking yourself:
Do you have dependents relying on your income?
Would you be able to cover your mortgage or living costs if you couldn’t work?
Could you manage financially if you faced a serious illness or injury?
If the answer is “no” or “not sure,” protection insurance may provide vital peace of mind.
How BSL Assured can help you
Navigating protection insurance choices can be overwhelming. At BSL Assured, we’re committed to helping UK customers understand their options with clear, jargon-free advice tailored to your needs.
We encourage you to speak with one of our experts for guidance on protection insurance that suits your personal circumstances. Together, we can help you secure your financial future so you and your family are covered when you need it most.
Protecting what matters most is easier when you understand your insurance fully. Contact BSL Assured today to learn more about protection insurance and take the first step towards peace of mind.