Running your own business or working as a contractor offers incredible freedom, but it also means taking on additional risks—especially when it comes to financial security during illness. With record-breaking payouts from protection insurers in 2023, now is the perfect time to consider how Critical Illness Cover could safeguard your income and your loved ones.
A Record £7.34 Billion Paid Out in 2023
According to the Association of British Insurers (ABI) and Group Risk Development (GRiD), insurers paid out £7.34 billion in claims to individuals and families facing bereavement, illness, and injury in 2023—an average of £20.1 million per day. This marks an increase from previous years, showing how vital protection policies are when unexpected events arise.
Critical Illness Cover Reaches a New High
Among these payouts, Critical Illness Cover accounted for a record-breaking £1.2 billion, reflecting a 13% increase from 2022. The number of claims also rose by 10%, with the average payout reaching £67,267.
For contractors, business owners, and professionals who may not have the same employer-backed safety nets as traditional employees, this kind of financial support can be life-changing.
The Leading Cause of Claims: Cancer
Cancer remains the most common reason for critical illness claims, with insurers paying out £777 million to those diagnosed in 2023. Other major causes include heart attacks, strokes, and neurological conditions—any of which could leave you unable to work for months or even years.
What About Income Protection?
For those concerned about day-to-day expenses, income protection can be just as crucial. In 2023, insurers paid out £177 million in income protection claims, with an average payout of £9,425 per claim. While the number of claims has declined since the pandemic, long-term claims continue, with some individuals receiving payments for over 20 years.
For self-employed professionals, an extended illness or injury could mean a complete halt to income. With policies covering anything from musculoskeletal issues (like back pain) to mental health conditions, income protection ensures you can continue to meet your financial commitments even if you’re unable to work.
Claims Acceptance Remains High
Worried about whether a claim would be paid? The good news is that 98.3% of new individual claims were accepted in 2023. The most common reasons for declined claims were failing to disclose pre-existing conditions and not meeting policy definitions—reinforcing the importance of choosing the right cover and being transparent during the application process.
Why Critical Illness Cover Matters for Contractors and Business Owners
Unlike traditional employees, contractors and business owners don’t have the safety net of employer-provided sick pay. A critical illness diagnosis can impact both personal finances and business operations, making protection policies even more essential.
Here’s why it’s worth considering:
✅ Financial Security – A lump sum payout can cover medical costs, mortgage payments, and day-to-day living expenses.
✅ Business Continuity – If you’re a sole trader or small business owner, protection ensures your company can stay afloat while you recover.
✅ Peace of Mind – Knowing you’re covered allows you to focus on your health rather than financial worries.
Take Control of Your Future
The increasing number of claims and payouts in 2023 highlights just how vital protection insurance is. If you’re a contractor, business owner, or professional, investing in Critical Illness Cover could be one of the smartest financial decisions you make.
Want to explore your options? Speak to a Broadbench adviser today and ensure you have the right protection in place.
Source: Association of British Insurers (ABI)
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