Protection pay outs reached record high last year – but just what is protection insurance?

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Protection pay outs reached record high last year – but just what is protection insurance?

Lifetime news

Posted on: 12/06/2023

The total amount of protection pay outs for both individual and group protection policies hit £6.85bn in 2022, according to the Association of British Insurers (ABI) and industry body Group Risk Development (GRiD).

This is a relatively small increase from the previous record £6.8bn of pay outs by protection providers in 2021.

Overall, providers paid out around 98% of claims last year.

But just what is Protection Insurance, and what are the key policies?

Protection Insurance provides financial protection to you or your loved ones if you were to become ill, unable to work or sadly pass away.

It is a sad fact that the impact of these events could substantially affect your finances and may mean you don’t have enough money to pay your usual outgoings, which could seriously affect your lifestyle and even your health and emotional wellbeing.

There are three main protection insurance products; Income Protection, Critical Illness Insurance and Life Insurance.

How much do they cost?

This will depend on your individual circumstances and on the amount you would want to be paid in the event of your death, injury or illness.

What does each of them provide?

Income protection pays you a regular income if you can’t work because of sickness or disability, and continues until you return to paid work, or you retire. It may help you maintain your lifestyle. Income protection insurance is also known as permanent health insurance.

Critical Illness Insurance can help you and your family while you deal with your illness and subsequent treatment. It pays out a lump sum if you meet one of the list of definitions that the insurer specifies, which include cancer, heart attack, stroke, organ failure, multiple sclerosis, Alzheimer’s disease and Parkinson’s disease.

Life Insurance is designed to provide financial support to your loved ones when you die. There are various types of life insurance. Some can pay out a set sum on your death, during a specified term, or there are policies designed to offer a decreasing amount of money to be paid, perhaps to tie in with a reducing mortgage loan.

Speak to Lifetime if you need help and assistance protecting yourself and your loved ones: buff.ly/38r7QjE

Lifetime Financial Management

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