Research from Aegon's customer and consumer panel has revealed four out of five (83%) people who purchased protection policies were unaware that providers publish this information.
Meanwhile some 81% of people believed the UK protection industry pays out less than 90% of life protection claims each year.
The research was undertaken on a sample of 571 respondents from the Aegon Customer and Consumer panel, surveyed in March 2017. The panel is comprised of a mix of Aegon customers and non-customers.
Half (52%) of people thought this figure was less than 70%. While 92% of consumers thought the industry pays out less than 90% of critical illness protection claims each year, with the majority (58%) of people believing this figure was less than 70%.
More than half (52%) of respondents were surprised to find that protection providers in the UK paid 97% of all protection claims in 2015.
In contrast, respondents suggested claims might not be paid due to not meeting the illness definition, providing inaccurate information on applications and claiming for something that's not included in the policy listed in the top three.
'Confidence in protection is low'
Aegon UK protection directorStephen Crosbie said: "Despite the fact that industry payout rates are high, confidence in protection and protection providers continues to be low.
"The common perception among people that less than 90% of protection claims are paid is concerning and shows the message that protection claims are being paid is failing to reach people.
"The reality is that contentious claims are few and far between. Just 3% of all claims are not paid and, in the vast majority of cases, there is a very clear reason for this.
"Paying claims is at the heart of what we do. It's central to our business and, as an industr,y we need to showcase claims statistics and stamp out any lingering doubt that insurers don't pay legitimate claims."
Crosbie added: "A simple discussion between financial adviser and client to identify the client's protection needs could give people the peace of mind and confidence that, should the unexpected happen to them, they are prepared."
"Protection claims statistics should form a key part of these conversations, to alleviate any doubt about claims being paid. We can only hope that one day this won't be necessary and people can focus on the quality, suitability and affordability of the product instead.
"Ultimately, these products are there to help people should anything unexpected happen and people need to trust us to deliver on this promise, which we have shown the majority of the time we do."
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