Do Insurance Companies Actually Pay Out?

For some people, a major barrier to taking out financial protection is the belief that insurers don't pay claims or that they will find any excuse not to honour the claim. But is this actually true?

In reality, it is a myth that is preventing some people from putting vital financial safeguards in place.

Do insurance companies pay out on protection?

According to the latest data from the Association of British Insurers (ABI), the protection industry paid out 97.9% of new claims in 2024, totalling £8 billion across both individual and group policies.

That's a strong indication that, in the vast majority of cases, insurers do exactly what they promise.

How do different protection insurances compare?

• Life insurance: 96.5% of claims paid — average payout £79,703
• Critical illness cover: 89.7% of claims paid — average payout £68,735
• Income protection: 80.0% of claims paid — average payout £25,133

Why would an insurer not pay a claim?

While payout rates are high, there are situations where a claim may not be honoured.

Common reasons include:

• Non-disclosure: Not fully or accurately sharing medical history, lifestyle habits (such as smoking), or other relevant details when applying
• Policy definitions not being met: For example, a condition may not meet the insurer's specific definition of a critical illness
• Policy exclusions: Certain conditions or circumstances may not be covered under the policy

These cases are not about insurers trying to avoid payment; they usually stem from incomplete or inaccurate information, or misunderstandings around what the policy covers.

How Can You Improve Your Chances of a Successful Claim?

The key is simple: honesty and clarity from the start.

When applying for protection:

• Be fully open about your health, lifestyle, and medical history
• Answer all questions accurately and thoroughly
• Work with a qualified adviser who can explain the details and match you with the right cover

This ensures you're placed with an insurer who understands your situation and can assess your application fairly, making it far more likely that a future claim will be paid.

Is it too late?

If you've been put off by misconceptions about insurers not paying out, the good news is that it is never too late to put some protection in place. A financial adviser can run through all the options available from an extensive panel of providers and provide choices that suit your individual needs and your budget.

Best of all, your adviser can review your policies with you regularly to make sure those products are still suitable and continuing to meet your needs. This is particularly useful if your situation changes during the life of the policy, such as a new job, your family grows or your health changes.

Why Protection Matters

While we all may expect to pay our mortgage every month, the truth is that life is unpredictable. Whether it's our health or something else, unexpected events can quickly put pressure on your finances. In those challenging moments, protection can offer a solution and real peace of mind.

Want to explore your options?

Speak to us today and we'll help design a protection plan tailored to your needs and circumstances.

HM REVENUE AND CUSTOMS PRACTICE AND THE LAW RELATING TO TAXATION ARE COMPLEX AND SUBJECT TO INDIVIDUAL CIRCUMSTANCES AND CHANGES WHICH CANNOT BE FORESEEN.

THE VALUE OF INVESTMENTS AND ANY INCOME FROM THEM CAN FALL AS WELL AS RISE AND YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.

Aitana Financial Services is a trading name of Kevin Paul Manktelow which is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority.

Approved by The Openwork Partnership on 17/06/2026