Protection Insurers Paid £7.84bn in Claims During 2025
UK protection insurers paid £7.84 billion in life insurance, critical illness, income protection and other protection claims during 2025, according to industry figures from the Association of British Insurers (ABI) and Group Risk Development (GRiD).
The figures put the scale of protection insurance payments into clearer terms at a time when consumers can still question whether insurers actually pay when serious illness, injury or death occurs.
Across individual protection policies alone, insurers paid £5.15 billion during 2025. That included life insurance, critical illness and income protection claims.
A total of 258,000 new individual claims were paid, with 97.9% of individual protection claims accepted overall. The average individual claim paid was £19,300.
Life insurance accounted for the largest share, with insurers paying £4.03 billion during the year and 96.7% of new life insurance claims accepted.
Claims figures challenge the idea that insurers rarely pay
One persistent concern around protection insurance is that a policy may not pay when it is needed.
The industry figures provide useful context.
Claims acceptance across individual protection has remained very high in recent years. The ABI reported the same overall 97.9% claims-paid rate for 2024, saying the proportion of new individual claims paid had remained at or above that level for a decade.
Individual insurer figures tell a similar story.
Scottish Widows reported in May that it paid £219 million in life and critical illness claims during 2025, supporting nearly 11,000 customers. The insurer said 99% of its life and critical illness claims were paid.
That does not mean every claim is accepted.
But it does provide a more useful picture than assuming protection insurance routinely fails to pay.
What the headline payout total does not tell us
Large annual figures can show the scale of financial support provided by protection policies, but they should not be confused with guidance on how much cover an individual household needs.
A £19,300 average individual protection claim combines very different types of policy.
Life insurance may provide a substantial lump sum following death.
Critical illness insurance may provide a lump sum following a qualifying diagnosis.
Income protection generally provides ongoing payments when illness or injury prevents someone from working, subject to the terms of the policy.
They are designed to solve different financial problems.
Our guide to life insurance versus critical illness cover explains why the products should not be treated as interchangeable.
The appropriate amount of protection therefore depends on the household rather than on an industry-wide average.
A family with a large mortgage and young children may have very different needs from someone with substantial savings, no dependants and little debt.
Why are some claims declined?
A high acceptance rate does not mean a policy will pay regardless of its terms.
The ABI has previously identified two recurring reasons for protection claims being declined: relevant information not being disclosed accurately when the policy was arranged, and a claim not meeting the definition required by the policy.
The reasons can differ between products.
With critical illness insurance, for example, a diagnosis may be serious but still fail to satisfy the specific medical definition required for a particular benefit.
With life insurance, a policy that has lapsed because premiums stopped may no longer provide cover.
Questions asked during an insurance application should therefore be answered carefully and accurately.
The headline claims-paid percentage is reassuring, but it does not replace the need to understand what an individual policy actually covers.
Families also need to know that a policy exists
A valid life insurance policy can only provide practical support if the people dealing with a death know where to find it.
Policies may remain in force for decades.
During that time, people move home, change email addresses, switch bank accounts and reorganise financial paperwork.
Keeping the insurer's name and policy details with other important financial records can make the claims process easier for the people left behind.
Our guide to how long a life insurance payout can take explains how missing paperwork, probate, trusts and other checks can affect the time needed to complete a claim.
Who eventually receives the money can also depend on how the policy has been arranged.
A policy written in trust may be handled differently from one that forms part of the deceased person's estate. Joint policies, assigned policies and beneficiary arrangements can create different outcomes.
See our guide to who receives a life insurance payout for more detail.
Claims statistics are reassurance, not a recommendation
The latest industry figures provide strong evidence that protection policies are paying substantial sums to people experiencing death, illness and injury.
They should not, however, be used as an argument that every household automatically needs every form of protection.
The more useful question is what financial problem a household is trying to insure against.
Life insurance is primarily concerned with the financial consequences of death.
Critical illness cover is designed around specified serious diagnoses.
Income protection addresses the loss of earnings caused by being unable to work because of illness or injury.
Existing savings, employer benefits, partner income, mortgages, debts and family responsibilities all affect whether additional cover is appropriate.
For anyone starting with life insurance, our guide to whether you really need life insurance looks at the financial circumstances that can make cover more or less relevant.
The bigger message behind the claims figures
Annual payout totals can make protection insurance feel more tangible.
Behind the billions of pounds are individual households dealing with bereavement, serious illness or prolonged absence from work.
The latest figures also provide a useful counterweight to the belief that insurers generally look for reasons not to pay.
Most individual protection claims are being accepted.
But good outcomes still depend on the fundamentals: the policy needs to be active, the application needs to have been completed accurately, the event needs to satisfy the policy terms and the people who need the money have to know the cover exists.
The claims figures therefore provide reassurance about whether protection insurance pays.
They do not answer the separate question of what type or amount of protection is appropriate for an individual family.
Sources
- Association of British Insurers and Group Risk Development — protection claims data for 2025
- COVER — Protection insurers paid out £7.84bn in 2025, 29 June 2026
- COVER — Scottish Widows pays out £219m in 2025, 26 May 2026
Important information
This article is for general information only and does not constitute financial or insurance advice. Policy definitions, exclusions, underwriting and claims requirements vary between insurers and products. Check the relevant policy documentation before making decisions about existing or new cover.
