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LV= protection claim payouts hit almost £118million in 2020

11/03/2021
PROTECTION
  • Covid claims hit £6.5m and accounted for more than 10% of death claims
  • LV= expects cancer and mental health claims to rise over next 12 months
  • Pandemic sparks rise in demand for remote health and welfare services

Protection specialist LV= paid record individual protection claims totalling nearly £118 million during 2020. LV= supported more than 9,000 claimants and their families paying 95% of all individual protection claims including life, critical illness and income protection.

Covid-related claims in 2020 totalled £6.5m and consisted of 619 death and 255 income-related claims. More than 10% of death claims in 2020 were for Covid-19. 

As well as COVID-related claims, the pandemic has also led to a big rise in demand for daily benefits through LV= Doctor Services, which provides access to six expert medical services via app or phone.  In 2020, remote GP appointments rose 88%, remote psychological services 496%, and remote physiotherapy 235%.

Debbie Kennedy, Director of Protection at LV=, said the impact of Covid-19 is likely to lead to a rise in mental health and cancer-related claims over the next two years. 

About the claims

Full details are available in the LV= Claims Report 2020.

LV= paid out over £28million in Critical Illness claims in 2020. Cancer accounted for 60% of all critical illness claims, followed by heart attack (10%) and stroke (8%), with the highest payment of £500,000. Some 222 claims were made following a cancer diagnosis with breast (26%), prostate (11%) and colon (9%) accounting for most claims. LV= paid a total of £282,500 for claims involving children from newborn to 21 years old 

Life assurance claims(including terminal illness claims) totalled almost £72million and the top causes for claims were cancer (43%), heart-related (17%) and Covid-19 (11%). 

LV= paid nearly £14.6 million in Income Protection (IP)* claims to 1,000 individuals and families. Musculoskeletal issues (22%), cancer (18%) and mental health (15%), accounted for over half of all income protection claims. Mental health accounted for £4.9 million of new and existing income related claims.

Claims for Personal Sick Pay** protection, which is designed for self-employed and contract workers, totalled over £2.6m with payments made to 1,200 individuals. The youngest claimant was 21 and the top reasons for claims were musculoskeletal (35%), Covid-19 (23%) and fractures (13%).  

In total, LV= paid 95% of protection claims in 2020. The remainder were declined for a variety of reasons including failing to disclose existing medical conditions, misrepresentation and fraud, and not meeting the policy definitions. LV= provides a breakdown of declined claims by product category and reasons in its latest claims report.

“The Covid-19 pandemic has been devastating. It is having a huge impact on people and we expect to see the effects on claims lasting for several years.

“Not only have people been affected directly by the virus, millions of people around the UK are struggling with mental health issues caused by isolation, coping with lockdown and financial worries.  The impact on the NHS and delays to appointments, screenings and treatment mean that serious conditions such as cancer could be diagnosed later, when the illness becomes more advanced and difficult to treat.

“We are anticipating a rise in advanced stage cancer diagnoses and claims in 2021 and 2022 caused by a backlog of screenings and delays to early treatment and, as a consequence, we expect that there will be an increase in mental health and cancer-related claims over the next couple of years.

“Paying claims remains at the heart of what we do but I am a strong believer that protection insurance is not only about paying claims; it’s about supporting customers when they are at their most vulnerable and proving emotional and practical support when they need it. 

“I am proud that LV= provides a range of services including Rehab Support Services, LV= Doctor Services which provides instant access to medical experts and the LV= Member Care Line gives access to qualified counsellors if members are experiencing emotional distress.”

 
Debbie KennedyDirector of Protection

About LV= Doctor Services

LV= offers members emotional and practical support that policyholders can access every day.  

LV= Doctor Services provides members with convenient access to six expert medical services - 24/7 Remote GP, Prescription Services, Second Opinion, Remote Physiotherapy, Remote Psychological Support and Discounted Health MOTs - provided by Square Health. 

The Member Care Line gives access to qualified counsellors if members are experiencing emotional distress, and trained nurses can offer a sympathetic ear and practical information on a range of health-related issues. 

Members with Income Protection policies can benefits from rehab support services such as physiotherapy and psychological services to help them with their return to work. Members also have access to free and confidential legal advice and support ranging from how to resolve a property or landlord dispute to dealing with identity fraud.

Notes

Claims – LV= major protection products – 2020

 

Protection 2020 Critical Illness  Income Protection  Personal Sick Pay  Life*** 
Total value paid  £28.3m  £14.6m* (Includes £2.5 million of new claims and £12.1 million of claims already in payment) £2.6m** (includes 1.7 million of new claims, and £0.9 million of claims already in payment) £72m
Average Claim  £77,135 £8,165 (average amount paid in total) £1,599 (average amount paid in total) £11,265 
Highest Claim  £500,000 £337,929 (total paid over claim) £16,824 (total paid over claim) £850,000
Average Policy duration at claim 8 years 8 years 10 months 3 years 1 month 9 years 1 month

***These figures include claims for Life Insurance, (including Terminal Illness claims) and whole of life products. Our whole of life products are no longer open to new business.


About the claims stats

*Income protection figures include new claims of  £2.5m, and claims already in payment that continued to be paid in 2020 of £12.1m
**Personal sick pay figures include new claims of 1.7 million, and claims already in payment that continued to be paid in 2020 of £0.9 million