Zurich UK Life has revealed it paid out 94% of income protection (IP) claims to customers during 2013.
This was an increase on the previous year where 90% of IP claims were paid to customers.
The insurer paid £12.3m to 689 income protection customers who were unable to work for long periods through illness, accidents or disability.
Of the 689 income protection customers receiving payments in 2013, 86 were new claims. Only 6% of claims were declined in total; 2.5 % because of non-disclosure.
Meanwhile 2.5% were declined because the definition of disability was not met and a further 1% were not successful because the customer was not in paid employment and so there was no income to replace.
Musculoskeletal problems (including spinal injuries) were the most common cause of claims (23); followed by neurological conditions including stroke (19) while mental health and cancer both resulted in 16 claims.
The average monthly benefit to Zurich's customers last year was £1,421 while the largest annual benefit was £59,000 per year.
Peter Hamilton, head of retail propositions for Zurich (pictured) said: "The cost to those people whose lives are turned upside down by illness, as well as that to businesses and the state, means the current situation is unsustainable. To try and address how we as an industry might start to tackle this problem, we will soon be launching new research to explore how we can encourage people to consider income protection.
"By publishing this research and our claims figures, we want to help customers understand the importance and the need for protection - and to remind them of the enormous difference income protection payments can make if they become unable to work."
