Latest figures from the Association of British Insurers (ABI) and Group Risk Development (GRiD) show that around £13m a day was paid out last year in protection payments.
In addition, 97.3% of protection insurance claims were paid in 2016.
The figures also show the number of life insurance claims paid hit 36,814 in 2016, with over 98% of claims paid out at an average value of £75,000.
Critical illness claims hit 15,464 with 92.2% of claims paid out at an average value of almost £68,000.
The ABI said that while there has been a small fall in the reported percentage of income protection claims paid, this is largely due to a change in the methodology around how this figure is measured. The ABI has changed the methodology in order to make its data more meaningful.
Raluca Boroianu‑Omura, ABI assistant director, head of health and protection, said: “The fact that Protection insurance products pays out £13m a day shows how they can help to relieve the financial strain on families following a death, serious illness or injury. Insurers deliver on their promise to help individuals and households during a time of great distress, as demonstrated by the fact that over 97% of all protection claims were paid in 2016.
“Serious illness or injury can occur at any time and will inevitably cause strain on families financially, as well as personally. Products such as income protection, life insurance and critical illness cover improve the financial resilience of individuals, households and businesses and give peace of mind.
“Importantly, protection products also relieve financial pressure on the welfare state and the NHS.”
