Financial Protection. DO IT.
- kevincoghlan
- Jun 2
- 2 min read
Towards the end of the first quarter, the life insurance companies announce high level information about the claims they paid in the previous 12 months and usually they give those numbers some historical context. The primary areas they cover are the core areas of life assurance lump sums, specified illness lump sum payouts and income replacement for individuals who are out of work longer term due to illness or injury. The information is usually supported by webinars and a report and this year’s data was both interesting and sobering. For the purpose of this piece, I’ll reference two insurance companies’ history of payment of claims.
Interesting fact: The total claims paid out by Irish Life in the last 5 years was an enormous €1 billion. This amount was paid out to 8957 dependants and beneficiaries and amounted to 98% of notified claims. The total value of life cover claims, alone, paid out by Irish Life in 2021 was €64 million!
Aviva Life and Pensions paid out a record €118.6m to customers with life cover, specified illness policies and income protection last year and was up 11pc year on year, when Aviva paid out €106.5m on policies. About 2,000 of the 2,628 claimants who received payments last year held income protection policies, with Aviva paying out €48m to those customers.
A full 5pc of the income protection claims came from people unable to work because of long Covid or because of complications arising from Covid and for the third year in a row, the main medical reason for income protection claims was psychological issues, accounting for 26pc of claims, followed by orthopaedic issues at 22pc.
We have been in this business for long enough, fortunately or unfortunately, to have arranged a significant number of claims and payouts for our clients. Our experience has been profound. In the event of a death of a loved one, where the survivor is financially dependent, we have noticed that while the bereavement itself may be difficult, too often tragic, the survivor becomes concerned very early on, about their financial position and security. Where businesses are involved it is important, if not critical, to have enough shareholder cover or keyperson cover to ensure that the business survives intact for the remaining stakeholders and that the dependant family’s interests and lifestyles are protected.
In essence, when the tragedy occurs, once the undertaker has been contacted and matters arranged, we are likely to get a call very soon afterwards.
We have administered claims for both business and personal scenarios and the lessons are simple: Be active in deciding what financial protection you need. Seek advice (from us please) and follow through, first of all to decide what kind of protection you need, to ensure any medical requirements are completed. In a shareholder situation, of course, there are, frequently, interpersonal dynamics and agendas which can often get in the way of the decision making process, even when shareholders are close.
But again, having paid out to businesses and families at a critical time, we have seen the enormous benefit, comfort and relief those settlements have provided and have been left shuddering at the thought that the cover might not have been there.
Download The Full Report Below
