Aviva pays out on 95% of claims for critical illness

By Jeff Prestridge for The Mail on Sunday
Updated: 10:12 EDT, 6 March 2011

Insurer Aviva paid nearly 95% of claims made on its critical illness policies last year, totalling more than £136m.

Lessons: Louise Colley of Aviva

The figure was a vast improvement on 2004 when the insurer paid out on 74% of claims.

Aviva is one of the leading providers of critical illness policies designed to pay out a tax-free lump sum when a policyholder suffers a serious illness. Other providers include Axa, Ageas, Bupa and Legal & General.

In the past, providers have been criticised for failing to meet claims, often using controversial non-disclosure rules to thwart claimants. But there has been a huge change in recent years following pressure from consumer groups and industry trade body the Association of British Insurers.

Providers are now more open about the consequences of not disclosing any past medical problems, resulting in an average of 90% of claims being met.

Louise Colley, head of protection marketing at Aviva, says: 'We've learnt lessons. When people buy cover they are now aware that disclosure is key. We spell it out.'

Analysis of Aviva's latest data shows that the average payout last year was £89,000 with the biggest percentage of claims relating to cancer.

The average age of claimants was 44.

Critical illness cover is not cheap. A young family where both adults are 30 and non-smokers would pay monthly premiums of between £55.50 (Aviva) and £63.03 (Friends Provident) for £100,000 of cover over 30 years.