There are plenty of people who just think that Critical Illness Cover is a con and doesn’t pay out. These people are often very vocal about their opinion and rarely back down even when presented with the correct information.

It’s good to see then, that Life Assurance companies publish their claims settlement history to counteract these opinions. This year Scottish Provident published their claims settlement history from January through to June. During this period Scottish Provident paid out £51,616,715 in Critical Illness Cover claims.

The figures make for very interesting reading. Here are  just a few of the statistics published:-

• 703 claims paid
• 87.3% of claims paid
• Average payout £73423
• Largest claim value £552487
• Average age of claimant 44
• Average months in force before claim 73

So first of all 12.7% of claims were not paid out which equates to 102 claims.  Of these 10.8% of the claims did not the critical illness definition and 1.9% were declined due to ‘non-disclosure.’  Non-disclosure means that the applicants failed to disclose all of their past medical history at application.  It’s importnant to tell the life assurance company EVERYTHING.  Don’t give them an excuse not to pay out!

Breaking the figures down further we can see the claims were paid out:-

• Cancer 378 claims equating to £30,501,924.  The average age of claimant was 46
• Heart attack 86 claims equating to £5,619,252.  The average age of claimant was 48
• Stroke 62 claims equating to £4,476,089.  The average age of claimant was 44
• Children’s benefit equating to £782,463. The average age of claimant was 11!
• Multiple Sclerosis 33 claims equating to £2,364754.  The average age of claimant was 40
• the list goes on…..

Not very pleasant reading really especially the children’s benefit statistics.  What is surprising is the average age of claimants in that people often have a perception that only ‘old age pensioners’  suffer from heart-attacks and strokes.  The real statistics tell a different story.

Of these claimants many were probably homeowners with mortgages to pay.  Having the critical illness claim probably either paid off the mortgage completely or at least paid a significant amount of it off.  It’s doubtful that many of the claimants lost their homes during treatment because they couldn’t afford to pay their mortgages and day to day bills.

The parents who had to claim for children’s benefit were also able to pay their monthly bills too.  If you had a sick child with a potentially life threatening illness would you be able to go to work each day?

There will always be people who think critical illness cover is a con but the figures show here that there are also those who see it a valuable asset to personal financial planning.