According to research conducted by The Risk Store, in 2014 life insurance companies paid a total 75,653 claims.
This represents $4.9 billion paid by life insurers over the course of the year.
The Risk Store’s managing director, Peter Wincott, said the findings are “good news” for the industry, especially after the negativity it has been facing.
“We feel the industry can proudly state whilst there may be areas of our industry model that could do with improving, one thing we do is help get consumers financially protected, and life insurers do pay claims – lots of claims,” Mr Wincott said.
The research also uncovered some interesting trends in what life insurers were actually paying claims on, he said.
“Interestingly, accidents and suicide have now replaced respiratory disease as the third leading cause of death,” he said.
“[Also,] mental health and cancer have again swapped positions for the second and third leading causes of TPD [claims].”
The Risk Store’s founder, Sue Laing, said the findings can also help advisers overcome clients’ concerns about whether they will actually be paid.
“We know, [having published these types of findings since 2006], how useful they have proven to be for those ‘insurance companies never pay’ barriers that advisers face daily,” Ms Laing said.
“Also, every adviser has their individual case studies to tell, but without the overall picture, those confronting numbers, it’s still a battle to get over the ‘Ah yes, but it won’t happen to me’ attitude.”
Sorry , after 45years in the industry I can assure you that numbers & stats DON’T sell…its the stories, the relevance, the emotion that compel people to purchase an intangible product that they might fund for a long period of time & never receive a payout. Understanding the essence of ” peace of mind” would probably help the misguided marketing messages from the “experts” that pervade this space.
I can guarantee this will drop significantly in the years to come. All the direct insurers with 50% lapse rates and 50 odd % claim failures will make sure of it. Well done providers, you will destroy the industry.
Could you imagine the state of the economy and the pressure on the tax payer if these policies weren’t in place.