Insurers paid £202m in year to families of Covid victims

INSURERS PAID out £202m 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 £202m paid, more than £128m was for individual policies while more than £73m 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 £1m 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 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.