21 Life Insurance Claims Statistics in Singapore (A Data-Driven Study)

We always make life insurance decisions emotionally.

“What if I’m taken out of the picture, how would my family cope financially?”

And we tend to neglect the logical part.

That’s why today, we’re taking a whole new look at concrete numbers to give us greater insights on life insurance – coverage on death, total and permanent disability, and critical illness.

We spent 57 hours studying 36 months of life insurance claims statistics in Singapore.

And not forgetting to double-check our numbers.

Here are some very interesting findings…

Table Of Contents

The Objective of This Study

We buy life insurance because of the what-ifs…

And when others question why we bought it?

The answer is usually along the lines of, “because my agent tell me one”.

So therefore, the aim of this study is try to quantify these what-ifs and provide a more objective view into insurance.

It’s to derive meaning from raw data (that usually don’t mean much on its own) so that you can say you bought life insurance because of so and so.

The Data We’re Analysing

Most insurance companies do not publish detailed claim statistics.

There’s only one company that does…

NTUC Income.

The period of data that’s available online (as of 15 Sep 2020) is from Jan 2016 to Jun 2019.

We’re only looking at Jul 2016 to Jun 2019 (a total of 36 months/3 years) to make it easier for analysis.

The data that’s available consists of the following:

  • Total number of claims for life insurance (death, total and permanent disability, and critical illness)
  • Total claim payouts broken down by the type of claim
  • Specific details on individual claims ($100,000 and more) such as age, cause, exact claim amount

Here’s a look at what NTUC provides for each month:

overview of NTUC claim statistics

And here’s a look at what 36 months of data look like:

36 months of data

We organised and tabulated everything to present our findings that’s simple and easy to understand.

4 Limitations to This Study

As with any study, we can’t have a perfect scenario.

Assumptions have to be made and we need to work with what’s available.

We’re not researchers but we try to produce the results accurately and show them as it is.

Here are 4 limitations:

1) Data only from one company

First off, the data comes from only one company as there are none available from others.

It’s always good to have data gathered from different sources as one company might not reflect the same outcome as with other companies. Also, customers may have multiple policies from different insurers.

However, in my view, it still gives a very good perspective.

One thing to note is on the definitions.

Death, Total and Permanent Disability, and Critical Illness (only 30+ of them) are pretty standard across the board. However, whether early critical illness is included in the data is unclear.

The types of policies:

… are also not known.

2) Representing only claims

Secondly, the figures and details you would be seeing are from people who had insurance and made a successful claim.

It does not represent the probability of death, getting disabled or contracting a critical illness. That’s outside the scope of this study.

It also does not represent those who didn’t have insurance and the undesirable happened.

3) Specific details are only available for claims that are $100,000 or more

Individual details like the cause, age and claim amount are only available for claims that are $100k or more.

This is a limitation as the younger folks generally might not have higher coverage. And thus, the data might be skewed towards the older folks.

So just take note…

4) Minor discrepancies

During the compilation of data, we discovered a few numbers that can’t be tallied.

For example…

In Jul 2016 and May 2017, the numbers didn’t add up.

minor discrepancy 1

So we took the sum of the three rows because that can be attributed.

And…

The sum of the “Total” across 36 months didn’t match the sum of each individual claim amount.

minor discrepancy 2

So we took the total figure when added up individually which amounted to $246,670,471. The other figure amounted to $246,611,159.

These minor discrepancies shouldn’t matter much as their impact is extremely small on the bigger picture.

Let’s go ahead and show you what we found…

21 Key Findings from This Study

1) Death accounts for 47.51% of all life insurance claims

life insurance claims

The total number of life insurance claims throughout these 36 months is 8634. Of which, 4102 are from death.

This translates to a percentage of 47.51% (4102/8634).

At the same time, there is an average of 1367.34 (4102/3) death claims per year.

2) The average death claim payout is $48,534.11

average death claim

The total payout of death claims throughout these 36 months is $199,086,911.

This also meant that the average death claim payout per year is $66,362,303.70.

The average death claim payout is $48,534.11 ($199,086,911/4102).

KEY TAKEAWAY
Death represents a huge percentage of life insurance claims. What’s important to note here is the average death claim payout of $48,534.11. Assuming that there are no other insurance payouts, that amount may be insignificant especially when other family members depend on it. It might not last long.

3) Total and permanent disability accounts for 2.82% of all life insurance claims

Of the total life insurance claims (8634) throughout these 36 months, only 243 are from total and permanent disability (TPD).

The percentage of this is 2.82% (243/8634).

At the same time, there is an average of 81 (243/3) TPD claims per year.

4) The average total and permanent disability claim payout is $63,797.76

average TPD claim

The total payout of TPD claims throughout these 36 months is $15,502,854.

Translating to an average TPD claim payout of $5,167,618 per year.

The average TPD claim is $63,797.76 ($15,502,854/243).

KEY TAKEAWAY
TPD has always been claimed the least. In my opinion, the chances of a TPD claim is lower compared to the other two. And this is reflected in the premiums you pay for TPD coverage – very affordable. Just like death, the average claim payout can be seen as low especially when you’re unable to perform any form of work to earn an income, yet you still need to pay for daily expenses and other commitments for the rest of your life.

5) Critical illness accounts for 49.68% of all life insurance claims

There are 4289 claims from critical illness (CI) out of the total life insurance claims (8634).

The percentage of this is 49.68% (4289/8634).

At the same time, there is an average of 1429.67 (4289/3) CI claims per year.

6) The average critical illness claim payout is $52,343.37

average ci claim

Throughout these 36 months, the total payout of CI claims is $224,500,696.

Bringing the average CI claim payout per year to be at $78,833,565.30.

The average CI claim payout is $52,343.37 ($224,500,696/4289).

KEY TAKEAWAY
Critical illness accounts for the highest percentage of all life insurance claims. Rightfully so because you don’t need to experience death to be able to claim from CI, and the probability of a CI happening may be high. This is also the reason why premium for CI coverage is higher than the rest. Having said that, it’s still important to have some CI cover as it can potentially strip away your ability to work for a prolonged period.

7) The average life insurance payout is $50,855.98.

average life insurance claim

Let’s take a look at the overall picture.

The total life insurance payouts for the 36 months is $439,090,461.

And take that number to divide by the total number of claims of 8634.

And we’ll get the average life insurance payout of $50,855.98.

KEY TAKEAWAY
Life insurance consists mainly of death, TPD and CI. If any of that happens, it’s likely that you’ll lose the ability to earn an income. Your payouts come into play. After that is used up, you need to utilise your hard-earned assets (cash at bank, investments, properties, etc). All in all, the average life insurance payout of $50,855.98 might not be enough to replace the potential loss of a lifetime income.

8) Only 13.90% of total claims are $100,000 and above

life insurance claim amounts

Out of 8634 claims, only 1200 are $100,000 and above.

This represents only 13.90% (1200/8634) of the total claims.

9) The total claim payouts which are $100,000 and above account for 56.18% of all payouts.

total claim payouts

The total claim payouts ($100,000 and above) are at $246,670,471.

This represents 56.18% ($246,670,471/$439,090,461) of the total claims payout.

KEY TAKEAWAY
The above 2 findings reinforce the point that most Singaporeans may be underinsured. With only a small percentage of claims being $100,000 and above, yet they already account for more than half of all total payouts, one can only wonder how the situation would be like for the rest who receive less than $100,000 of claims.


Note: From this point onwards, specific data are only available for claims of $100,000 and more. Therefore, the following findings shouldn’t represent the overview of all claims and should never be taken out of context.


10) The highest number of death claims happen during age 61 to 65

ages of death claims
AgeNo. of Claims
0-53
6-100
11-153
16-208
21-259
26-305
31-3510
36-4019
41-4541
46-5047
51-5552
56-6080
61-6590
66-7070
71-7533
76-8014
81-853
86-902
91-950
96-1000
>1000

KEY TAKEAWAY
What’s interesting is that although the life expectancy in Singapore is at 84.8 years, the majority of death claims happen before that. There may be 2 reasons to explain this. One is that term insurance would’ve expired and thus, if death were to happen after, there’s no claim. Second is that if one were to hold a whole life insurance, they might have surrendered the plan earlier. Both of these scenarios might lead to lesser death claims nearer to the life expectancy age.

11) The top cause of death (claimed) is cancer

causes of death claims
CauseNo. of Claims
Cancer194
Heart Attack89
Others. Unknown84
Chronic Lung Disease44
Suicide25
Stroke22
Accident19
Kidney Failure5
Chronic Liver Disease4
Encephalitis2
Motor Neurone Disease1

KEY TAKEAWAY
People don’t die because of “old age”, they die (even when passing away peacefully) because there was an underlying issue. Which is why in death certificates, there’s always a specific cause. In Singapore, cancer has always been the talk of town. It’s something to pay close attention to. Either to prevent or cure it.

12) The highest number of death claims due to cancer happen from age 61 to 65

ages of death claims due to cancer
AgeNo. of Claims
0-51
6-100
11-150
16-202
21-252
26-301
31-351
36-403
41-4510
46-5016
51-5523
56-6036
61-6546
66-7035
71-7512
76-803
81-851
86-902
91-950
96-1000
>1000

KEY TAKEAWAY
The cause of death claims – cancer and all types – from different ages don’t differ much because cancer represented the biggest percentage of all death claims.

13) The majority of death claims happen from $100,000 to $199,999

payouts of death claims
Amount ClaimedNo. of Claims
$100,000 to $199,999316
$200,000 to $299,99981
$300,000 to $399,99938
$400,000 to $499,99918
$500,000 to $599,99912
$600,000 to $699,9997
$700,000 to $799,9994
$800,000 to $899,9994
$900,000 to $999,9994
$1,000,000 and above5

KEY TAKEAWAY
Even for those who are covered for more than $100k, most are still in the $100k-200k region. The count drops off sharply after each range. Singapore is expensive with all the daily necessities, expenses for kids, etc. If you’re the sole-breadwinner or part of a dual-income household, is the payout enough?

14) The highest number of total and permanent disability claims happen during age 56 to 60

ages of tpd claims
AgeNo. of Claims
0-50
6-100
11-151
16-200
21-250
26-302
31-351
36-401
41-455
46-504
51-559
56-6010
61-656
66-701
71-750
76-800
81-850
86-900
91-950
96-1000
>1000

15) The top cause of TPD (claimed) is due to other medical conditions besides Stroke

causes of tpd claims
CauseNo. of Claims
Due to Other Medical Condition Besides Stroke26
Due to Stroke7
Due to Terminal Illness7

16) The majority of TPD claims happen from $100,000 to $199,999

payouts of tpd claims
Amount ClaimedNo. of Claims
$100,000 to $199,99924
$200,000 to $299,9996
$300,000 to $399,9994
$400,000 to $499,9990
$500,000 to $599,9995
$600,000 to $699,9990
$700,000 to $799,9990
$800,000 to $899,9990
$900,000 to $999,9990
$1,000,000 and above1

KEY TAKEAWAY
The data for TPD is not significant to show any interesting findings. And the causes of TPD are vague too. Do take note that most TPD coverage from insurance companies lasts only till 65 or 70 years old.

17) The highest number of critical illness claims happen during age 51 to 55

ages of ci claims
AgeNo. of Claims
0-52
6-101
11-154
16-204
21-252
26-309
31-3515
36-4042
41-4598
46-50109
51-55138
56-60119
61-6581
66-7039
71-757
76-801
81-850
86-900
91-950
96-1000
>1000

KEY TAKEAWAY
The majority of CI claims happen at an earlier age as compared to that of death (61 to 65). Also, a large percentage of CI claims are from age 40 to 65. This could be the most critical period.

18) The top cause of CI (claimed) is cancer

causes of critical illness claims
CauseNo. of Claims
Cancer491
Heart Attack72
Coronary Artery By-pass Surgery30
Stroke25
Heart Valve Surgery13
Benign Brain Tumour9
Kidney Failure9
Parkinson’s Disease7
Alzheimer’s Disease5
Aorta Surgery2
Motor Neurone Disease2
Chronic Liver Disease1
Deafness1
Encephalitis1
Major Organ Transplantation1
Others, Unknown1
Terminal Illness1

KEY TAKEAWAY
As usual, cancer is the main culprit for CI claims. The numbers shown here go inline with what Life Insurance Association has stated that more than 90% of all CI claims come from cancer, heart attack, stroke, kidney failure, and coronary artery by-pass surgery. In this data, 93.45% (627/671) of the CI claims are from only those five.

19) The highest number of cancer claims happen from age 51 to 55

ages of ci claims due to cancer
AgeNo. of Claims
0-52
6-101
11-154
16-201
21-251
26-309
31-3514
36-4039
41-4581
46-5080
51-5598
56-6077
61-6549
66-7028
71-757
76-800
81-850
86-900
91-950
96-1000
>1000

KEY TAKEAWAY
Just breaking down the most important cause of CI claims – cancer. Thus far, you would’ve realised by now that critical illness, especially cancer, is something that you need to be aware of. Cancer is the top cause not just for CI claims, but for death claims as well. So that’s why the probability of death happening after contracting cancer is much greater than any other causes.

20) The majority of CI claims happen from $100,000 to $199,999

payouts of ci claims
Amount ClaimedNo. of Claims
$100,000 to $199,999466
$200,000 to $299,999136
$300,000 to $399,99941
$400,000 to $499,99914
$500,000 to $599,9997
$600,000 to $699,9992
$700,000 to $799,9990
$800,000 to $899,9990
$900,000 to $999,9992
$1,000,000 and above3

KEY TAKEAWAY
As usual, the range of claimed amounts is similar to death and TPD. One thing to note here is that you may not need the same coverage of death or TPD as if one were to contract CI, he either recovers or the worst happens after five years (general rule of thumb).

Conclusion

So there you have it.

Hopefully you’ve gained some insights into life insurance claims.

Nobody wishes to claim from insurance.

However, the underlying reason why we buy it is because of the potential claims arising from misfortunes, which will assist us and our families.

The question you should be asking yourself first…

Am I sufficiently covered right now?”

Feel free to use our life insurance coverage calculator to estimate how much you life insurance you should have.

Abram Lim

With over 7 years of experience in the financial advisory industry, and previous stints in Citibank and UOB, Abram eagerly shares his knowledge by publishing research-backed articles. Learn more about Abram