The benefits of protection
Figures from the ABI have highlighted the importance of protection cover, as insurers paid out £7.84bn in individual and group protection claims in 2025 - this is equivalent to £21.5m every day.
Individual policies
The research found that 97.9% of individual claims resulted in a payout last year. It has remained at or above this level for the last decade, meaning that the vast majority of individual protection claims resulted in a payout. Insurers paid out £5.15bn in individual life insurance, income protection and critical illness claims, which is 3% lower than in 2024 but 22% higher than in 2022. The average payout was £19,300 last year, up 2% on 2024.
Work absences on the rise
A recent survey by WTW shows that employee absence has reached the highest level in a decade in the UK. Half (51%) of UK employers have reported a rise in short-term absence over the last two years, while 55% noted an increase in long-term absence and disability. Mental health and workplace stress remain major concerns, alongside musculoskeletal (MSK) issues and chronic conditions. These findings tie in with the stats from the Association of British Insurers (ABI), which show that MSK conditions are the most common reason for income protection claims.
Claims for mental health
Awareness about mental health is growing, which has likely contributed to more people feeling able to take time off work when they are unable to cope. Last year, insurers paid out £39m in income protection claims to support those with mental health conditions, accounting for 19% of all claims paid.
The importance of income protection
Last year, 7,600 people who had made an income protection claim were able to return to work with the support of their payouts and other health services provided by their insurer. Meanwhile, more employers are recognising the importance of group protection policies, providing their employees with financial support if they are unable to work. Some of these group policies also provide rehabilitation support, helping employees return to work safely.
Protection is invaluable
Rebecca Ward, Assistant Director, Head of Health and Protection at the ABI emphasised the value of protection cover: “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.”
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Sources:
Protection insurers pay out £7.84 billion
https://www.wtwco.com/en-gb/insights/2026/04/optimising-absence-management-in-the-uk-the-role-of-group-income-protection
What to take from this update
- Insurers paid out £7.84bn in individual and group protection claims in 2025.
- 97.9% of individual claims resulted in a payout last year.
- Income protection can provide financial support during illness and may include help with returning to work.
“These figures show the difference protection can make when illness or injury affects a household. A useful starting point is to look at your regular outgoings and the support you already have, then consider how you would manage if your income stopped. I can help you review those needs and explore cover that suits your circumstances and budget.”
Is this relevant to your plans?
News is useful context, but it cannot account for your income, deposit, credit history, property or existing mortgage. If this update has raised a question, send Holly a quick message and explain what you are hoping to do.
Ask Holly on WhatsAppInformation correct at the date of publication and provided as a general guide only. Mortgage products, criteria and market conditions can change. This article does not constitute personal advice.