£202m paid out in insurance claims following coronavirus deaths

Insurers paid out £202 million to support the families of people who died in 2020 due to coronavirus, the Association of British Insurers (ABI) said.

The total equates to £553,000 of payments being made every day last year.

Some 11,198 claims were received under individual and group life insurance policies.

Of the total £202 million paid, more than £128 million was for individual policies while more than £73 million was paid out under group life insurance schemes.

The average payout on individual policies was £13,100 and for group polices it was £74,600.

One particularly large death claim led to £1 million being paid to the deceased’s dependants.

Meanwhile, a claim for £250,000 was paid one day after the death notification was received.

Another claim, under a policy to cover mortgage payments, led to £91,000 being paid out within two days of notification.

The ABI said this is the first time it has compiled life insurance payouts arising from a single event in this way, reflecting the significance of the pandemic.

Across all insurance products, including business interruption and travel insurance, ABI members expect to pay up to £2.5 billion for Covid-19 insurance claims incurred in 2020.

Yvonne Braun, the ABI’s director of long-term savings and protection, said: “No-one will have been affected by the pandemic more than the families of those who have tragically died due to Covid.

“While no amount of money can ever replace a life, insurers have and continue to do everything they possibly can to help families cope financially through these distressing and worrying times.”

The ABI added that the UK insurance and long-term savings industry is also helping support some of those hardest hit by the pandemic in other ways.

Launched in May 2020, the Covid-19 Support Fund has raised more than £100 million to help charities affected by Covid-19.

The ABI’s figures were released as insurer LV= said it has now paid more than 1,400 pandemic-related claims totalling £12.1 million.

The total covers life insurance, critical illness and income protection claims triggered by coronavirus.

LV= said that for Covid-19 death claims, the average age of those involved was 67.

Coronavirus was responsible for 42% of LV= death claims in January 2021 and the number of admitted death claims jumped by 40% compared with January 2020.

Debbie Kennedy, director of protection at LV= ,said: “The Covid-19 pandemic has been devastating. It is having a huge impact on people and we expect to see the effects on claims lasting for several years.”