February 24, 2024

The Importance of Serious Illness Cover

Introduction

Serious illness cover, also known as critical illness insurance, provides a lump sum payment to policyholders upon the diagnosis of a specified serious illness. This report examines the claims statistics for serious illness cover in Ireland for the year 2024, drawing on data from leading insurance providers such as Zurich and Aviva.

Key Findings

  1. Claims Payout and Illness Distribution
    • In 2024, Zurich paid out over €23.4 million in serious illness claims. The majority of these claims (approximately 69%) were due to cancer. Among female claimants, 83% of serious illness claims were cancer-related, with breast cancer comprising 45% of these claims. For male claimants, cancer accounted for 57% of claims​ (Zurich Ireland)​​ (Lion.ie)​.
    • Aviva reported a significant payout of €121 million for various claims in 2024, with a notable portion allocated to serious illness cover. Cancer, heart attacks, and strokes were the leading causes of claims, reflecting broader trends in serious illness cover across the industry​ (Aviva Insurance)​.
  2. Average Age and Gender Breakdown
    • The average age of serious illness claimants was 52 years, highlighting that serious illnesses often strike in mid-life. This statistic underscores the importance of maintaining coverage as individuals approach middle age​ (Zurich Ireland)​​ (Zurich Ireland)​.
  3. Rejection Rates and Common Causes
    • Insurance providers typically approve the majority of claims, with Zurich and Aviva both reporting high acceptance rates. However, some claims are denied due to non-disclosure or because the illness did not meet the policy's specific definition. For example, certain types of prostate cancer must meet a particular Gleason score to qualify for a payout​ (Lion.ie)​​ (Aviva Insurance)​.
  4. Financial Impact of Serious Illness
    • The financial burden of serious illnesses extends beyond medical costs. The Irish Cancer Society highlighted that cancer patients face significant out-of-pocket expenses, averaging €756 per month, even with a medical card or private health insurance. Additionally, those unable to work due to their illness experience an average income drop of €1,527 per month​ (Zurich Ireland)​.
  5. Policy Features and Additional Benefits
    • Insurance companies have enhanced their offerings with additional benefits. For example, Aviva includes services such as digital GP access, mental health support, and bereavement counselling as part of their serious illness cover packages, providing comprehensive support beyond the financial payout​ (Aviva Insurance)​.

Conclusion

The data for 2024 illustrates the critical role of serious illness cover in providing financial support during challenging health crises. Cancer remains the predominant reason for claims, followed by heart attacks and strokes. With the average claimant being in their early fifties, the importance of maintaining robust coverage as individuals age is evident. Additionally, the financial strain of serious illnesses necessitates comprehensive coverage and additional support services to mitigate the broader impact on individuals and families.

Recommendations

  1. Policyholders should ensure full disclosure during the application process to avoid claim rejections.
  2. Consideration of additional benefits such as mental health support and digital GP services can provide holistic support.
  3. Regular reviews of coverage are advised to ensure that the policy meets the changing health needs and financial situations of the insured.

By focusing on these areas, policyholders can better navigate the challenges posed by serious illnesses, ensuring they have the necessary financial and emotional support during difficult times.

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