The mutual insurer paid out 235 claims on average per day in 2020.
More than £136m was paid in life and terminal illness claims. Nearly 1,500 term life insurance claims were paid (95.7%), an increase from 2019, with an average of £73,000 per claim. Terminal illness claims paid totalled more than £30m with an average payout of £135,000.
Whole of Life
Nearly a third of a billion (£314m) was paid out in whole of life claims with 99.9% of claims paid. The average payout in 2020 was £3,820, up by 48% from 2019.
Royal London paid 92.4% of critical illness (CI) claims. On average more than £73,000 was paid for CI claims with more than £133m paid in total. Of the CI claims that were declined, the majority did not meet the plan definition. The most common reasons for a CI claim in 2020 were cancer (63%), heart attack (12%) and stroke (7%).
More than £4.1m was paid in new and existing income protection (IP) claims in 2020, with an average of around £5,500 per claim. Fewer than 7% of IP claims were not paid due to misrepresentation or a claim not meeting the plan definition. The average IP claimant was 40 years old.
A Helping Hand
In addition to paying out claims, customers can also access the Helping Hand service which comes with all Royal London protection policies bought through an adviser. The service offers comprehensive, tailored support and access to a dedicated nurse for customers and their families.
More than 600 individuals benefited from Helping Hand, with the top reasons for referrals being bereavement (26%), cancer (18%), mental health (15%) and orthopaedic (15%).
Sadly, 55 of the referrals to Helping Hand were for children, with the most common condition being mental health (29%). The average length of support for children with mental health conditions was four months.
Support from Helping Hand is available from the day the policy is taken out and does not require a claim to be made.
Craig Paterson, Chief Underwriter at Royal London, said:
“Last year we paid £591m in protection claims, a record figure for Royal London. We recognise that it has been a challenging year in many ways, and the pandemic has had a devastating impact on many families. In 2020, we paid out more than £13m to families who had experienced a death due to Covid-19.
“In addition to paying claims for Covid-19, customers are also able to get support through Royal London’s Helping Hand service. Customers and their families can receive access to the support of a dedicated nurse with tailored and personal support whenever it's needed, for as long as it's needed.
“Receiving a payout can help to ease the financial strain of bereavement or falling seriously ill, but our Helping Hand service offered through all of our protection policies can help to ease the emotional strain.”
Claims not paid
Of all protection claims received 0.4% were not paid out due to either misrepresentation or the claim not meeting the policy definition – both at 0.2%.
||Total value paid (£)
||Average claim paid (£)
|Term Life Insurance
|Total Permanent Disability
|Whole of Life Assurance
|Individual IP (new claims + claims already in payment)
|Individual IP (new claims only)