Life Insurance Claim Payout Rates by Insurer

Life Insurance pays out a lump sum to the family of the policyholder if they were to pass away during the term of the policy.

Many people are worried that Life Insurance may not pay out when their loved ones need it the most, but this page aims to provide an indication of just how good insurers are at paying Life Insurance claims.

The statistics below cover the payout rates for both Level Term and Decreasing Term Life Insurance. Successful claims for Whole of Life Cover are often higher.

While Life Insurance often includes Critical Illness Cover, the below Life Insurance payout data refers to standalone life cover only.

When Does Life Insurance Pay Out?

Life Insurance is designed to pay your loved ones a cash lump sum should you die while the policy is active. The below statistics cover term insurance claims, so these are policies that run for a set term and then cease.

Many plans can also pay out early if the policyholder is diagnosed with a terminal illness (there is usually the requirement that the policyholder be diagnosed with less than 12 months to live).

When Might Life Insurance Not Pay?

There are two main reasons why a small amount of life claims: fraud and a lack of disclosure when taking the policy out. Fraud occurs when someone makes a fake Life Insurance claim. It’s usually a deliberate act by the policyholder who is not, in fact, deceased or terminally ill.

Fraud will account for some of the below insurers’ declined claims, but assuming your family is making a genuine claim this isn’t anything to worry about.

Another small proportion of Life Insurance claims are declined due to a lack of disclosure. However, this can easily be avoided by being honest and forthright about your medical history when you take out the policy.

When you apply for Life Insurance through Drewberry, we’ll help you go through the necessary medical questions to get the policy in place.

Providing you’re totally upfront when answering these questions, it’s unlikely your loved ones will have any issues claiming later on.

Samantha Haffenden-Angear
Independent Protection Expert 

Overall Protection Payout Rates Across All Insurers

Each year the Association of British Insurers (ABI) publishes average payout rate statistics from across all insurers.

The latest figures are from 2022 and show that 96.9% of all Life Insurance claims were paid, with over £3.9 billion getting paid out in total.