Families insured with group life assurance have received more financial payouts as a result of Covid-19 in the first half of 2021 than in the whole of 2020, according to Group Risk Development (Grid) – with the average payment over £98,000.
Overall, in the first half of 2021, the group risk industry supported 1,218 families of employees who died from Covid-19 with group life benefits, an increase of 35 per cent on the 891 families that were supported during the whole of 2020.
The total value of group life benefits paid as a result of Covid-19-related claims stood at £125.7m for H1 2021, compared to £93m for 2020.
The average lump-sum payment for Covid-19 related claims for H1 2021 was £98,112.
Grid statistics show 18 per cent of all group life claims paid by insurers during H1 2021 were related to Covid-19. This is in line with ONS statistics for England and Wales, where for deaths occurring during H1 2021, Covid-19 made up just under 20 per cent of all deaths in the working-age population.
Grid spokesperson Katharine Moxham says: “The financial hardship that can follow the death of a loved one can be devastating, and it can impact every area of mental and physical health and wellbeing of those left behind.
“Employers that offer group life assurance to their staff provide some of the best possible support for wider health and wellbeing. This is one of the most affordable employee benefits, and is also one of the most tangible, and this benefit would have been hugely valued by those that have been affected. “The increase in payouts shows the impact that Covid-19 continues to have, and how important it is that companies offer employee benefits that provide financial support to their staff, particularly in light of Covid-19, and we urge all employers to consider offering it.”
Grid coronavirus data in detail
Lump sum benefits
A total of 6,688 lump sum death benefit claims were paid in H1 2021, of which 1,199 were where Covid-19 has been recorded as a cause of death. Deaths attributed to Covid-19 therefore made up 18% of all lump sum claims paid in H1 2021. A total of £750.2m was paid, of which £117.6m was for Covid-19 related claims. The average lump sum payment was £112,171, the average payment for Covid-19 related claims was slightly lower at £98,112.
Dependants’ death in service pensions
A total of 86 dependants’ death in service pension claims were paid in H1 2021, of which 22% or 19 were where Covid-19 has been recorded as a cause of death.
The value of the dependants’ death in service pension claims has been capitalised using a figure of 40 in line with the annual Grid claims studies. The capital value of all dependants’ death in service pension claims paid in H1 2021 was £48.2m, of which £8.1m was for Covid-19 related claims. The average value of Covid-19 related claims was £425,515 relative to an average of £560,764 for all dependants’ death in service pension claims paid in H1 2021.
About the statistics
Covid-19 related group life claims paid 1 January to 30 June 2021
On behalf of Grid, Gen Re has collected data from group life providers identifying Covid-19 claims paid during H1 2021.
This analysis involved the same ten insurers that have previously provided data at H1 2020 and full year 2020. This is to all intents and purposes a comprehensive analysis of the whole market.
The data collected included the number and value of all claims paid under lump sum and death in service pension schemes between 1 January and 30 June 2021. Claims where Covid-19 is stated as the primary or secondary cause of death on the death certificate or reported on the claim form were reported as a subset of the total.
Given we are reporting claims paid during the first half of the year, and there is an average delay of 50 days between date of death and date of payment, this will capture deaths occurring between November 2020 and May 2021. The impact of the second wave throughout the winter of 2020/21 in the UK will be largely covered.
Claims notification and payment
The weighted average time to notify the insurer of a Covid-19 related death claim was 39 days which is slightly quicker that the delay in reporting death claims for all causes.
The average period from the date of notification to the date of insurance payment was 14 days for Covid-19 related claims versus 19 days for all claims during H1 2021.