Do life insurance companies pay out?

7 September 2026

Insurers paid 97.9 per cent of new individual protection claims in 2025. The refusals are rare, and most of them trace back to the application form or the policy wording.

7 min read · Ben Tomlin · Last reviewed September 2026

The short answer

Yes, almost always. UK insurers paid 97.9 per cent of new individual protection claims in 2025, worth £5.15 billion, and that rate has held for a decade. The small number that fail usually trace back to something left off the application, or a critical illness diagnosis that did not meet the policy definition.

Do life insurance companies pay out? The short answer

Nearly every claim gets paid. The Association of British Insurers reports that 97.9 per cent of new individual protection claims were paid in 2025.

That figure has stayed at or above 97.9 per cent for the past decade. It is not one good year.

In cash, the industry paid £5.15 billion on individual life, critical illness and income protection claims in 2025. Add workplace schemes and the total reaches £7.84 billion.

That works out at £21.5 million paid every day to people who had been bereaved, made ill or injured.

So the belief that insurers look for a way out does not survive contact with their own published data.

The number that matters to you.

If you are refused, it is almost never a surprise decision made at claim stage. It is the application you filled in years earlier catching up with you. That is the part you control.

How much UK insurers paid out in 2025

The ABI publishes the whole market rather than one insurer, so it is the fairest place to start.

Measure	2025 figure	Change on 2024
Individual protection claims paid	£5.15 billion	Down 3 per cent
Number of individual claims	258,000	Down from 275,000
Average individual claim	£19,300	Up 2 per cent
Critical illness paid	£1.25 billion	Down 3 per cent
Average critical illness claim	£67,000	Down from £67,600
Income protection paid	£209 million	Up 2 per cent
Average income protection claim	£10,700	Up 7 per cent

The average individual claim of £19,300 hides an enormous spread. A small over 50s plan and a mortgage sized term policy both sit inside that average.

Look at the critical illness average instead. £67,000 is roughly a deposit, or several years of a mortgage, arriving while you are still alive.

Income protection is the odd one out at £10,700 average. That is because it pays monthly rather than as a single lump sum.

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Payout rates by insurer for 2025

The 2025 figures are now out from several insurers. They are worth reading alongside the industry data.

Insurer	Life claims paid	What else they published
Aviva	98.7 per cent	£860m paid, 40,277 claims settled
Royal London	98.4 per cent across all protection	£821m paid, a record for the business
The Exeter	95 per cent of life claims	93 per cent of new income protection claims paid

Royal London paid £326 million in term life and terminal illness claims in 2025. The average life payout was £85,437 and the average terminal illness payout £133,238.

Aviva settled 40,277 life claims in 2025 and paid out more than £860 million on them. Across all protection lines it paid over £1.3 billion, its fifth consecutive year above £1 billion.

The Exeter paid 1,140 new income protection claims in 2025, up 4.5 per cent on 2024. It paid £14 million across all its income protection claims, up 12 per cent.

These are the insurers' own published reports. Treat them as the insurers' own figures, and read the definitions of what counts as a claim.

Why some life insurance claims are not paid

Roughly two in every hundred new individual claims are not paid. The reasons are consistent and mostly avoidable.

Non-disclosure on the application

This is one of the two common reasons the ABI gave in its 2024 claims data. If you did not mention something the insurer asked about, the policy can be reduced or voided.

It is rarely deliberate. People forget an investigation from six years ago, or decide a symptom was not worth mentioning.

The rule is simple. Answer what is asked, in full, and if you are unsure whether something counts, put it down.

The definition was not met

This dominates critical illness rather than life cover. The condition was real, but it did not meet the severity the policy wrote down.

Early stage prostate cancer and a transient ischaemic attack are common examples.

The claim fell outside the policy terms

Suicide inside the first year, a policy that had lapsed for non payment, or a condition excluded at underwriting.

What this means for you.

None of these three is an insurer changing its mind. All three were decided when the policy was set up. That is why the application and the wording matter more than the premium.

Why the payout rate drops for critical illness

The headline percentage hides a real difference between products, and it is worth understanding before you buy.

Aviva declined 1.3 per cent of life, whole of life, over 50s and terminal illness claims in 2025. It declined 8.7 per cent of critical illness, children's benefit and total permanent disability claims, and 10 per cent of income protection claims.

Royal London shows the same shape. Its overall payout rate was 98.4 per cent in 2025, but its critical illness payout rate was 89.3 per cent.

The reason is not insurer behaviour. It is that death is a fact and a critical illness is a definition.

Life cover asks one question. Did the person die while the policy was in force.

Critical illness asks whether the diagnosis meets a written medical threshold. That is a question with room to fall the wrong side of the line.

So if you want the highest certainty of payment, life cover gives it. If you want money while you are alive, you accept a definition, and the wording of that definition is what you are actually buying.

This is the single strongest argument for comparing policy wordings rather than premiums.

How to make sure your claim is paid

Answer every medical question in full, including things you think are trivial or old.
Keep a copy of your application. If a claim is queried years later, that document is the evidence.
Read the definitions for cancer, heart attack and stroke before you buy, because those three cause most critical illness claims.
Tell the insurer if your policy details change, and never let a policy lapse by accident over a failed direct debit.
Write the policy in trust where it is appropriate, so the money reaches the right person without waiting for probate.

The last point is the one people skip, and it costs the most time at the worst moment.

A claim that is paid quickly and a claim that is paid into a frozen estate feel very different to the family receiving it.

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Frequently asked questions

What percentage of life insurance claims are paid in the UK?

The Association of British Insurers reported that 97.9 per cent of new individual protection claims were paid in 2025. That figure has stayed at or above 97.9 per cent for the past decade. Individual insurers publish their own rates too. Aviva paid 98.7 per cent of life claims in 2025 and Royal London 98.4 per cent across all protection.

How much do UK insurers pay out in protection claims?

Insurers paid £5.15 billion on individual protection claims in 2025, and £7.84 billion once workplace schemes are included. That is about £21.5 million a day.

What is the most common reason a claim is refused?

Non-disclosure on the application form. Something the insurer asked about was left off, usually by accident. The other common reason the ABI gave in its 2024 claims data is that a critical illness diagnosis did not meet the severity written into the policy definition.

Why are critical illness claims refused more often than life claims?

Because death is a fact and a critical illness is a written definition. Aviva declined 1.3 per cent of life claims in 2025 and 8.7 per cent of critical illness, children's benefit and total permanent disability claims. Royal London paid 98.4 per cent of all claims but 89.3 per cent of critical illness claims.

What is the average life insurance payout in the UK?

Royal London reported an average term life payout of £85,437 in 2025 and an average terminal illness payout of £133,238. Across the whole market, including small over 50s plans, the ABI average individual claim was £19,300 in 2025.

Does an insurer check my medical records when I claim?

It can, particularly on a claim made in the early years of a policy. That is why the application needs to be accurate at the time you make it, rather than something to sort out later.