Royal London paid 97.3% of claims totalling more than £331m during 2016, according to the insurer's newly published claims statistics.
Almost £1m was paid in free cover claims - free cover is provided for up to 90 days while an application is being processed and will pay out on receipt of a valid claim before any premium has been collected from the customer.
In addition more than 60% of all claims paid were fast-tracked and paid within three days.
Royal London has also published two sets of statistics for income protection to reflect the ABI's new reporting methods compared to the previous method of reporting IP claims.
The ABI has changed how it measures the percentage of claims paid for income protection so that this now reflects only new claims received during the year that were paid and declined.
The previous measure also took into account all claims in payment, and decisions made regarding these claims.
Some 92.2% of CI claims were paid. Critical illness (CI) claims accounted for more than £156m of payments last year with an average payout of almost £83,000.
Once again the most common reason for claims was cancer (63%), followed by heart attack (10%), stroke (6%), multiple sclerosis (4%) and children's critical illness (3%).
Some 1.1% of claims were declined due to misrepresentation and 6.7% did not meet the policy definition.
The average age of a CI claimant was 48 years old and the average policy had been in force for 10 years and 5 months.
Almost £2.3m was paid in children's CI claims.
Royal London paid 96.8% of term life insurance claims totaling almost £108m.
In addition 90.9% of terminal illness claims were paid amounting to almost £26m.
Whole of Life
More than £33m was paid in whole of life claims and 100% of claims received were paid.
Using the previous claims statistics reporting methods, Royal London paid 95.6% of income protection claims totaling £3.6m based on new claims and those already in payment.
Of the 4.4% of claims that weren't paid, 2% were declined due to non-disclosure and 2.4% for claim definition not being met.
As a member of the Association of British Insurers this was the first year Royal London was declaring claims based on the amount of new claims only, excluding claims in payment before 2016 that continued to be paid in 2016.
On this basis, the value of claims paid in 2016 was almost £1m and 83.8% of claims were paid. The top three reasons for IP claims were cancer (29%) mental health conditions (26%) and musculoskeletal conditions (26%).
Group head of protection strategy Debbie Kennedy said: "There has been much debate about whether providers should publish claims statistics. We firmly believe that it is the right thing to do to help the industry improve trust with customers. Insurance is an important part of financial planning and consumers need to believe that a claim will be paid and can provide a much-needed financial cushion when the worst happens."
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