Life insurance firms have paid out double the number of disability claims for policies sold through financial advisers over the past five years, according to new analysis conducted by major consultancy KPMG working with the Financial Services Council (FSC).
The new analysis, released this week, shows that over the latest period the life industry paid out benefits of $4.9 billion of disability income claims for policies through financial advisers – double the average annual payment level of the preceding five-year period.
The data analysis showed that the most common cause for people who made a disability income claim were accidents (38%), musculoskeletal (18%), mental disorders (11%) and cancer (10%).
Importantly, it found that much of the increased pay-out levels was due to people remaining on claim for longer, rather than a significant increase in numbers of new claims.
The new disability income claims analysis covered the five-year period from 2014 to 2018 and involved an examination of 71,000 new and closed clams for insurance policies purchased through financial advisers from 10 insurers.
Commenting on the findings, KPMG actuarial partner, Briallen Cummings said the study had shown a significant rise in pay-outs in all categories of claims over the past five years but the increase in mental health claims was especially notable.