New figures from the ABI and Group Risk Development (GRiD) reveal that insurers paid out £7.84 billion in individual and group protection claims across 2025 – equivalent to £21.5 million every day. The data highlights the vital financial support protection products continue to provide to those experiencing bereavement, illness and injury.
Proportion of individual claims paid remains at or above 97.9% for over a decade
When looking at individual policies alone, the proportion of protection claims paid in 2025 remained strong at 97.9%. Insurers paid out £5.15 billion in individual life insurance, income protection and critical illness claims across the year, down 3% from 2024 but still 18% higher than in 2022.
A total of 258,000 new individual claims were paid last year and the average claim was £19,300 – up 2% on 2024.
Mental health claims still a significant driver of income protection payouts
Protection insurers paid out £39 million in individual income protection claims to support people with mental health conditions in 2025. This figure represents nearly one-fifth (19%) of all claims paid, despite musculoskeletal conditions remaining the most common reason for an income protection claim1.
A record £209 million was paid out for all types of individual income protection claims in 2025, up 2% from the previous year’s record. The average claim also increased 7% to reach £10,700. In the last year, 7,600 people were able to return to work with the support of these payouts as well as increasingly available insurer-provided health services.
More than £1 billion paid out in critical illness claims
The total value of individual critical illness claims was £1.25 billion in 2025, a 3% decrease on the previous year’s record. Despite this drop, payouts have now surpassed £1 billion each year for five consecutive years.
Almost two-thirds (65%) of critical illness claims were for cancer, up 3% compared to 2024. The average payout in 2025 was £67,000, demonstrating just how impactful cover can be.
Rebecca Ward, Assistant Director and Head of Health and Protection at the ABI, said: "Protection insurance remains a cornerstone of financial resilience, helping customers and their loved ones navigate life’s most difficult moments. Each year, income protection, critical illness and life insurance policies provide vital financial support to thousands of people facing bereavement, illness or injury. With modern products increasingly including health benefits, the sector is also helping people remain economically active and in work – directly supporting the Government’s ambition to keep Britain working and drive economic growth.”
Breakdown of combined individual and group claims using data from the ABI and GRiD
Products
New Claims Paid
Percentage of new claims paid
Total value for all claims paid
Average value of claims paid
Critical Illness
20,498
90.2%
£1,422m
£69,375
Life
48,055
96.7%
£4,031m
£83,892
Total Permanent Disability
393
66.7%
£31m
£79,834
Whole of Life
193,577
100%
£1,477m
£7,631
Income Protection
18,469
79%
£880m
£23,416
All Protection Products (Group and Individual)
280,992
95.9%
£7,841m
Includes figures from the Association of Financial Mutuals
Figures are for both new claims and income protection claims in payment
Footnotes
1. One-third (33%) of individual income protection claims were for musculoskeletal (MSC) conditions in 2025.
Products explained
Critical Illness (CI) cover: A policy that pays out a lump sum when the policyholder is diagnosed with a specified illness. Cancer is the most common cause of claim.
Total permanent disability (TPD) insurance: A policy that pays out a lump sum payment if you become permanently disabled and can’t work anymore. It can be provided within a critical illness policy or as a standalone product.
Term Life Insurance: A policy that will cover the policyholder for a specified number of years, usually until retirement age. This policy pays a lump sum, commonly used to cover outstanding mortgage payments, if the policyholder dies unexpectedly or prematurely.
Whole of Life Insurance: A product that covers the policyholder until the day they die. It typically allows the policyholder to build a small pot of savings to use to cover funeral costs, or to leave an inheritance to family members. Also known as ‘life assurance’.
Income Protection: A policy designed to help fill income gaps when a person is unable to work due to illness or injury. It will usually cover a percentage of the policyholder's salary and will often provide support services to keep people in work and help employees back into work.
