Johnny Timpson's Blog
The Assurance of Insurance
The first death claim on a “modern” life assurance policy followed the death of salt merchant William Gibbons in London in 1584. The sum assured was £4800 which, at that time, was a huge sum when you consider that the average daily pay was 10 pennies. However, the claim process left a lot to be desired. A dispute as to the policy term being measured in lunar or calendar months saw a petition made to Queen Elizabeth I, the intervention of the Lord Mayor of London and a ruling in the Admiralty Court.
Scottish Widows first claim was paid in May 1816 following the death of Mr Brodie. It's interesting to see that just as we pride ourselves on the quality of our claim service today, steps were taken back in 1816 to ensure the £500 claim (equivalent to £34,100 in today’s terms) was paid quickly. Our claims philosophy over the years has always been and remains simple - we’re dedicated to finding a way to pay every claim, because every claim counts.
We continually strive and work to do everything we can to help you minimise the risk of an unpaid claim for your clients. This is why we’ve improved, simplified and innovated our protection processes from quote to claim and expanded on the support services available for our individual and business protection customers. Working in partnership with health and disability charities means we have realised that physical, mental and financial health are today becoming increasingly interrelated. This is why Scottish Widows Care with the support it offers our claimants and their families in collaboration with RedArc Nurses, and our partnership with Macmillan Cancer Support‘s Financial Guidance Team is central to our proposition.
Paying claims is our most important job but we know figures don’t mean much to your clients. We’re working hard behind the scenes to help you recommend and make the right cover accessible for your clients, have transparent protection conversations, and debunk the myths that many consumers and advisers perceive as truths, such as:
Claims don’t get paid
The level of financial protection claims payment continues to run far ahead of public perception. Our research* shows that people, on average, believe that only 34% of protection claims are paid out by insurance companies yet in 2018, Scottish Widows actually paid 98%**. This highlights that it is essential that we challenge this particular perception to build consumer trust and advocacy.
Due to my pre-existing medical condition I won’t be able to qualify for and access cover from Scottish Widows Protect
Cover in the UK is far more accessible than many people perceive. In 2017, the Scottish Widows Protect underwriting team reviewed over 77,000 applications submitted to them, with over 53,000 disclosing a health condition. Of those applications with a disclosure, 89% applying for life cover, and 93% of those applying for critical illness cover, were offered terms.
Protection, I don’t need it
Due to reforms made to both the Mortgage and working age Bereavement Benefits safety nets, it’s essential that clients review their financial protection needs. Joint mortgaged, dual earning households do not have access to the new DWP mortgage safety-net scheme unless both parties to the mortgage are no-longer earning, plus meeting the other means-testing criteria. In the case of working age Bereavement Benefits for families with dependent children, the level of monthly benefit is now reduced to £350pm, with payments time-boxed to and coming to an end after 18 months. Where the parents are cohabiting, their surviving partner and dependent children are currently not entitled to bereavement benefits at all.
I get protection benefits provided by my employer
The perception of workplace benefit entitlement runs ahead of reality with many employees unaware of what they receive. Our research* shows only 21% say they receive this employer provided benefit with 14% unsure whether they receive it or not.
For more help with your conversations, you can download this handy Mythbuster.
At Scottish Widows, we’re committed to playing our part in improving consumer trust in the assurance of insurance. For details of the business development tools and support available, visit our website.
* Scottish Widows Protection Research 2018
** Scottish Widows Claims Statistics 2018