Protection payouts rose again in 2021, with £6.8bn1 paid out on almost 300,000 different policies. In a year of pandemic-inflicted uncertainty and devastation, the figures highlight the crucial support offered by protection policies.
On the up
In total, £1.6m more was paid out every day in 2021 than a year previously. Individual payouts for protection policies, including individual and group life insurance, income protection and critical illness claims, rose by 9%2 year on year, the latest in a three-year upward trend.
Payouts for COVID-19 related individual claims almost doubled in 2021 from 2020, to reach a collective value of £261m. The value of an average protection payout was just under £15,000.
A positive aspect of the pandemic is the greater awareness it has generated about the need to prepare for unforeseen circumstances.
Younger people, who are sometimes reluctant to seek protection, have become more interested in securing their future. In the wake of COVID-19, 41% of enquiries have come from 18 to 34-year-olds, a 4% rise on pre-pandemic levels. Indeed, 17% of that demographic have considered taking out, or have taken out a protection policy, compared to 9% of the total population.
As with all insurance policies, conditions and exclusions will apply
1 Association of British Insurers