Life, Critical Illness and Income Protection Claims Summary. From January to December 2013

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1 Life, Critical Illness and Income Protection Claims Summary From January to December 2013

2 This is why we are here to financially protect our customers when they need it most. We are proud of what we have achieved for our customers in Here are the highlights: 111 million paid out for death claims 116 million paid out in critical illness claims 21 million paid in income protection claims 99% life cover claims paid 19 claims paid every working day for either life or critical illness 1 million paid per working day it s good to be with Friends. Source for all life, critical illness and income protection claims statistics: Friends Life Claims Department, Friends Life Individual Protection. Friends Life statistics correct as at 31 March

3 Feel confident in your financial protection Whether you are thinking about financial protection or already have cover in place, it s a choice that could play an important role for you and your family in the future. You ll want to know that you can trust the company you choose, that they will treat you fairly and pay out when you need them to. Friends Life has a heritage dating back over 200 years and a long history of paying protection claims. We re committed to open and honest communication, helping you to make or confirm your decision about your family s financial security. Part of that commitment is publishing our claims statistics every year. Our UK-based protection claims teams have more than 150 years experience of helping people through the claims process. In 2013, over 7,000 of our customers and their families found that we were there for them when it mattered most. 3

4 Handling your claim When you make a claim, it s likely to be during an unsettling time. That s why we make sure that you and your family receive the compassion and respect you deserve. We aim to settle your claim as quickly as we can, helping you to manage your immediate costs and plan for the future. Our claims are assessed in a consistent, fair and reasonable way. We pay valid claims as quickly and efficiently as possible, making the process as straightforward as we can. Our experienced claims team: work closely with you during your claim, guiding you through each step of the process keep you fully informed at all times, even when there s no immediate news listen carefully to your worries and needs, which we know will be unique to you make a fair decision based on the medical evidence, taking into account your individual circumstances are supported by a team of medical experts. If a claim is complex or outside our normal business circumstances it is reviewed by our claims committee. The claims committee ensure each claim is treated fairly and assess the individual circumstances of the claim. The committee exists to ensure that our claims decisions are consistent and fair to our customers. Example Recently we paid out for a customer who was suffering from bowel cancer. The customer received payment only 13 days from the time we were informed. The policy had been in effect for just under a year. Our purpose is to be there for our customers, when they really need us. It s these moments of truth that really matter, when we achieve what we have set out to do financially protect our customers. Stephen Payne Managing Director, Friends Life UK Protection 4

5 Life cover Although money will never replace you, it can provide financial security for your family at a difficult time, helping to pay off a mortgage or cover monthly outgoings. Did you know? We paid out over 14 million in terminal illness benefits. 99% of all life cover claims paid January to December % 100% Claims paid* 3,496 Highest pay out 7,000,000 Average pay out 31,867 Youngest claimant 23 Oldest claimant 104 Average age of claimant 69 Average policy duration to date of claim 19 years Source for all life, critical illness and income protection claims statistics: Friends Life Claims Department, Friends Life Individual Protection. Friends Life statistics correct as at 31 March *Excludes terminal illness. 5

6 Critical illness More people than ever are surviving serious illnesses such as cancer and heart disease. However, recovery can be challenging and expensive. Last year we paid 91% of critical illness claims, helping to provide vital financial assistance. In fact, only 2% of claims were declined for misrepresentation and 7% for not meeting the definition. 91% of all critical illness cover claims paid January to December % 100% Claims paid* 1,509 Highest pay out 880,429 Average pay out 76,843 Average age of claimant 46 Average policy duration to date of claim 7 years, 7 months *Excludes childcover claims. 6

7 Total amounts paid out on critical illnesses Cause of claim Amount paid Cancer 81,229,680 Heart attack 10,395,884 Multiple sclerosis 5,894,061 Stroke 4,907,131 Did you know? The top four illnesses claimed for: 1 Cancer 2 Heart attack 3 Stroke 4 Multiple sclerosis Benign brain tumour 2,447,826 Heart valve replacement 1,795,126 Coronary artery by-pass grafts 1,164,016 Traumatic head injury 965,340 Parkinson s disease 651,649 Cardiomyopathy 515,308 Did you know? Last year, we paid nearly 1.5 million in childcover claims. Angioplasty 452,898 Motor neurone disease 346,043 Kidney failure 243,360 Loss of limbs 211,233 Did you know? We paid out 3.7 million for total permanent disability claims. 70% 70% of illnesses claimed for of illnesses claimed for were cancer related were cancer related Key Key Cancer Cancer Heart attack Heart attack Stroke Stroke Multiple Multiple sclerosis sclerosis Benign Benign brain tumour brain tumour Other Other Source for all life, critical illness and income protection claims statistics: Friends Life Claims Department, Friends Life Individual Protection. Friends Life statistics correct as at 31 March

8 Critical illness claims paid by gender* Male claims Male claims Key Cancer Heart attack Stroke Other Multiple sclerosis Key Stroke Other Coronory artery by-pass Multiple grafts sclerosis Heart valve replacement Benign brain tumour Angioplasty Parkinson s disease Angioplasty Motor neurone disease Kidney failure Traumatic head injury Cardiomyopathy Loss of limbs Cancer Heart attack Coronory artery by-pass grafts Heart valve replacement Benign brain tumour Parkinson s disease Motor neurone disease Kidney failure Traumatic head injury Cardiomyopathy Loss of limbs Did you know? Female claims The most common critical illnesses people claim for are cancer and heart attack. However, Friends Life Protect+ offers cover for 49 additional serious conditions, childcover and valuable benefits such as Best Doctors and Bupa HealthLine.** 8 * Excludes childcover claims. **Best Doctors and Bupa HealthLine are non-contractual benefits that may be withdrawn at any time without notice. Bupa HealthLine is provided by or through subsidiary companies of the Bupa Group. BEST DOCTORS is a registered trademark of Best Doctors, Inc. Used with permission.

9 Youngest claimant 20 Oldest claimant 73 Average age of female claimant 47 years Average age of male claimant 45 years Sample of critical illness claims paid Gender of claimant Age at claim Policy in force Reason for claim Amount paid Male years, 6 months Heart attack 880,429 Male 28 1 year, 1 month Motor neurone disease 166,442 Female 45 5 years, 5 months Benign brain tumour 90,444 Male 28 1 month Open heart surgery 25,000 Female 29 6 years, 9 months Multiple sclerosis 119,892 Male 64 9 years, 7 months Stroke 10,000 Female months Bowel cancer 112,622 Male 50 2 years, 5 months Pancreatic cancer 21,082 Female 56 2 years, 2 months Breast cancer 77,110 Male 42 6 years, 8 months Loss of independent existence 369,899 Male 43 4 years, 3 months Heart valve repair/replacement 500,000 9

10 Income protection It can take time to recover from an illness or injury. If it results in a [GRAPH] loss of 85% income, of all new it income could protection impact claims the everyday paid January financial to December needs 2013 of you and your family. Last year, we paid 85% of all new income protection claims. In fact, we only declined 10% for not meeting the medical definition. 85% of all new income protection claims paid January to December % 100% Claims paid during ,169 Highest pay out* 6,225 a month Average pay out* 860 a month Average age of claimant* 47 Average duration of claims ending in years Source for all life, critical illness and income protection claims statistics: Friends Life Claims Department, Friends Life Individual Protection. Friends Life statistics correct as at 31 March

11 33% of income protection claims in payment were for mental illness** Claims paid by gender Key 33% of income protection claims in payment were for mental illness** Mental illness Musculoskeletal Other Nervous system Cancer Circulatory system Accident Key Did you know? Mental illness and musculoskeletal disabilities are the most common cause of income protection claims at Friends Life. Mental illness Musculoskeletal Other Nervous system Cancer Circulatory system Accident Male claims Key Mental Musculo-skeletal Other Nervous system Circulatory system Cancer Accident Female claims Youngest claimant* 27 Oldest claimant* 63 Average age of female claimant* 43 Average age of male claimant* 49 * These figures are correct at the benefit start date and represent new claims starting in ** As at 31 December

12 Fracture cover A sudden break can be hard on your finances, particularly if it stops you from working or you have to pay for unexpected costs, such as taxi fares or additional treatment. Our fracture cover option gives you the reassurance of knowing you ll receive a cash sum if you suffer one of 18 specified fractures in any 12 month period. Total paid out 273,900 Claims paid 256 Average pay out 1,070 Average age of claimant 34 Youngest claimant 18 Oldest claimant 62 55% 55% of claims of claims were were caused caused by sports, by sports, pastimes pastimes and hobbies and hobbies Key Key Sport/pastime/hobby Sport/pastime/hobby Fall/slip Fall/slip Occupation Occupation Physical Physical assault assault Road traffic Road accident traffic accident Other accident Other accident Unknown Unknown 12

13 When we can t pay From time to time we are unable to pay a claim for some of the reasons described below. We never like to do this, but it s only fair to our other customers and we will always provide a clear and thorough explanation. Please make sure you read the key features of any policy you apply for and provide full information when completing your application. Misrepresentation When incorrect information is provided. Sometimes we have to decline a claim because the customer did not give the correct information in response to a specific question. This could include details of a pre-existing condition or that they had already been experiencing symptoms of an illness before they applied. Every effort is made to ensure that our questions are clear and easy for you to understand. You will receive a copy of your application to review and amend if necessary. Example A customer was unable to work because of back pain. Investigations revealed the customer had experienced back problems for 3 years before taking out income protection cover. If the customer had told us this in answer to our specific application questions, we would have placed a back exclusion on the policy. The customer kept their cover with an additional exclusion, but the claim could not continue as it fell under the exclusion. Not a definition When a condition is not valid. Critical illness cover is intended for serious illnesses, as listed in the policy details. Sometimes customers mistakenly try to claim for minor illnesses which are not covered. If it appears you don t qualify we will still collect evidence to ensure that nothing has been overlooked. Example An Independent Financial Adviser (IFA) telephoned to advise his customer had been diagnosed with bowel/colon cancer. The medical reports revealed the diagnosis to be a large pre-malignant colonic polyp requiring a surgical resection. Final histology showed this to be an adenoma which is not a cancer. As the polyp wasn t cancer the claim could not be paid. 13

14 Don t take our word for it Our real-life case studies highlight how we were there for our customers when it mattered most. Riccardo s story As a chef and owner of a number of food businesses, Riccardo couldn t afford to be off work. His adviser recommended taking out Friends Life critical illness with fracture cover to financially protect himself and his businesses. It was advice that proved invaluable. During his usual walk home from work, Riccardo was in a serious road traffic accident. The affects of the accident were quick and devastating, injuring his head and face. There is a great deal involved with his journey to recovery and independence. The pay out on his critical illness and fracture cover means Riccardo can continue his treatment, while financially supporting his businesses and the people that keep them going. If it wasn t for sound advice from my adviser, and the pay out from Friends Life, I am not sure how I could have managed financially for myself, and especially my businesses. Riccardo Critical illness and fracture cover customer Nimisha s story As a mum of two, Nimisha s life was very busy. Prompted by the changes to insurance pricing for women, her adviser recommended taking out critical illness cover. It wasn t an easy decision for Nimisha who worried about her outgoings, but the little extra expense proved life changing. Nimisha was nearing the end of her maternity leave when she started to feel pains in her stomach. When it didn t improve, further exams revealed she was suffering from colon cancer. Undergoing treatment, Nimisha s outlook is positive. The pay out from Friends Life has allowed her to continue treatment, pay the bills, and focus on the things that really matter to her her children s future. If I can help others make the decision to take out a critical illness policy to protect themselves and their loved ones, then I will be happy. I can t begin to describe what a difference it has made for me and my family. Nimisha Critical illness customer 14

15 Notes 15

16 Friends Life and Pensions Limited An incorporated company limited by shares and registered in England and Wales, number Registered office: Pixham End, Dorking, Surrey RH4 1QA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Telephone calls may be recorded. Friends Life is a registered trade mark of the Friends Life group. FLIP/7149/May2014 (42081)