LV=’s latest Fuel for Life report highlights how support from advisers during the application stage can lead to fewer declined protection claims and better outcomes for clients.

In 2023, LV= paid out 94% of protection claims. Out of the 6% that weren’t paid, three out of four were declined due to misrepresentation.

The different types of misrepresentation outlined include:

• Innocent misrepresentation: When a client doesn’t disclose relevant information at application because they were not aware of it. For example, family medical history they did not know about.Careless misrepresentation: When a client leaves out relevant information when they take out their policy because they either forgot or didn’t think it was relevant. This may be an old injury that’s healed or an illness that they considered short term.

  Deliberate or reckless misrepresentation: When a client deliberately chooses to not disclose relevant information with the intention of misrepresenting their health. For example a medical diagnosis they were aware of.

LV’s Wealth and Wellbeing Research Programme found that clients had misconceptions about the claims process and why a claim may be declined. This could have an impact on their ability to answer underwriting questions correctly and may lead to deliberate misrepresentation.

Whilst the data shows that a rejected claim is the exception, not the rule, 56% of respondents said that they think insurers don’t want to pay claims. When asked, 15% of UK consumers would never feel comfortable disclosing their health conditions when answering protection insurance questions.

The research also found that 36% of UK adults are living with a long term physical or mental health condition, but 18% worry, when taking out a policy that their claims would not be paid due to the ‘small print’.

Mike Farrell, protection sales and marketing director at LV=, said: “At LV=, we want to be there for all our customers to offer crucial support during life events. Sadly, although only a small percentage of claims are declined, most of our declined protection claims could have been avoided if the right information was provided to us during the application stage.

“The latest issue of LV= Fuel for Life examines how advisers can help clients in answering underwriting questions accurately with real examples of misrepresentation and declined claims. We encourage advisers to ensure that people applying for protection cover understand the impact that non-disclosure can have on invalidating their policy.

“While discussing sensitive personal information is uncomfortable for many, it is important for applicants to be transparent and always share medical history so that advisers and insurance providers can easily find the best cover for them.”