We await with interest each year the claims statistics from the leading protection providers in the Irish market. Irish Life annually issue very insightful and detailed information about their claims, and we’ve taken the opportunity to dig a little into the claims data from their Retail division for 2021.
We never forget that the whole purpose of insurance is to pay claims to those who are unfortunate enough to require them. This is why we all insure ourselves against the financial impacts of death, an illness or an accident. The Irish Life data demonstrates how claims sit at the heart of their business – they paid out €171.9 million in death, terminal illness, specified illness cover, income replacement and rider benefit claims during 2021, under 3453 plans. This equates to €3.3 million per week.
We were particularly interested to see how the pandemic has affected claims. While the volume of claims paid by Irish Life during 2021, were on a par with those paid during 2020, overall claims numbers paid were almost 20% lower than 2019 (i.e. pre pandemic). Death claim volumes paid during 2021 were lower by 11% and specified illness were lower by 18% on 2019.
So, protection claims volumes paid during 2021 were still substantially down because of the pandemic. This is probably due to the reduction in national screening programs, decreased availability of medical investigations, people not attending GP’s or specialists as often and delayed legal processes during lockdowns. However, over the latter part of 2021 and into 2022 it does appear as if new claim notifications for death and Specified Illness Claims (SIC) has started to return to pre-pandemic levels.
Death Benefit Claims
Irish Life paid 132 COVID-19 related death claims to the value of €7.9 million during 2021. The average amount paid was €59,000. While the median age was 70 and most had a pre-existing medical condition, they did pay seven claims to lives under age 50. Typically, the underlying conditions were cancer, heart disease, diabetes, respiratory illnesses and dementia.
Sadly, Irish Life also paid 32 Terminal Illness (TI) claims during 2021 – this is where a death benefit is paid out on the diagnosis of one from a list of terminal illnesses. The total value of these was €4.1 million, with the average claim amount being just over €120,000 and with average plan duration of 13 years. The average age of claimants was only 51 for women and 56 for men. The two biggest cause of TI claims in 2021 were for brain and lung malignant cancers.
Specified Illness Claims
The biggest single individual medical causes of specified illness cover claims were: 134 breast cancers (18% of total claims paid, which is up on 2020), 73 heart attacks (including 10 on female lives), 72 prostate cancers and 48 strokes. Overall, 78% of SIC claims on female lives were for malignant cancers. Malignant cancers were also the biggest cause of any SIC claims between the ages 51-60.
62% of claims were for lives aged between 41 and 60. So again, key age ranges where our customers will very likely have families and financial commitments.
In summary, while the overall volumes of Irish Life claims paid are not yet back to pre-pandemic levels, this has already started to change. We remember every time we read these figures that behind every claim is a person or family that needed the financial protection of the products we recommend. That’s the ‘moment of truth’ for us as an advice profession and an industry as a whole.
We are currently dealing with the most inflation and price volatility than we have done in the last 12 years, with fuel and electricity making up approximately 50% of current inflationary pressures. The increasing costs of food, electricity and further increases announced can outstrip income making it financially difficult for many.
We for the month of April are offering FREE Financial reviews to see if you can save money on your existing Protection Policies (Life/illness/income/mortgage). With discounts being offered and improvements made to different products we will review your existing policies to ensure you are receiving the best products and most competitive premium. We will also review pension and investment policies as you may not be getting the most of your money due to selected allocation rates and policy fees.
If you want us to complete your FREE Review contact us today. We look forward to hearing from you!
The whole area of business protection might have slipped under the radar. With lots of people and some key individuals within businesses the death or illness of one of these people could result in real financial challenges for the business and need to be carefully considered.
There is a range of business protection solutions available to help businesses survive the death or indeed the serious illness of someone, that would result in a financial loss for a business. These solutions provide a number of benefits for businesses;
• They offer real peace of mind benefits to the directors or partners, as they remove the financial worries associated with the death or serious illness of a colleague.
• They remove the need for businesses or surviving partners to borrow money to buy out a deceased partner’s share of the business, or to buy out a partner who is no longer able to work due to a serious illness.
• They remove the need for a surviving family member to take a deceased person’s place in the business, in order to maintain the value of their ownership. There are a number of different types of business protection solutions available to suit the different types of business structures and profile of owners.
This is a form of life assurance that is commonly used within small companies, whereby each director insures themselves against the death of their partner, enabling them to buy out the partner’s shares on death and/or serious illness. As an alternative, the insurance can be effected by the company itself.
Similar to the above, partnership insurance is used in self-employed partnerships or in professional firms that have partnership structures. In this case, a partnership takes out insurance, protecting itself against the death or serious illness of an individual partner, enabling them to compensate the deceased partner’s estate for their share of the partnership. This means the partnership continues with the surviving partners, while the deceased’s family receives the value of their share of the partnership at death.
Key person insurance
This helps a business to minimise the impact of the death or serious illness of a key employee. This could be a senior manager or someone with specialist skills, who would need to be quickly replaced. The insurance can be used to quickly attract a replacement employee or indeed to pay off loans of the company that may have been guaranteed by the deceased.
These are examples of different forms of life assurance and illness cover, that can be used for different business related needs. The point in common though is that each will ensure the ongoing viability of the business. Can you afford not to have this cover?
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