Nearly half (45%) of adults between the ages of 25 and 44 who don’t have a protection policy aren’t sure they could cope financially if they were too ill to work.
Worrying research from LV= suggests that a large minority of working adults could be in significant danger of financial distress if they fell ill. And, whilst nobody ever expects to be ill enough to be absent from work long-term, LV=’s statistics suggest that it is more common than you might think.
In fact, the provider paid out over £20m in critical illness claims between January and September 2022, including 14 child critical illness claims totalling £360,000.
Protection – more important than ever
At a time when households across the UK are tightening their belts to cope with rising prices, protection insurance has never been more important. With three in 10 adults living from pay day to pay day2 and nearly a quarter (23%) dipping into their savings at least every one to three months due to the cost-of-living crisis3, many of us are less resilient to financial shocks than we used to be.
Mike Farrell, LV=’s Protection Sales Director, said, “The cost-of-living crisis will continue to be a challenge that many of us face for some time to come as the UK navigates through difficult economic conditions. Our research shows that three in five people without a protection product would feel more financially resilient if they had a policy that paid if they were unable to work due to illness or injury.”
Assessing your financial resilience
Unsure if you need a protection policy? The following questions should help you assess your financial resilience.
- How long could you continue to pay your mortgage/rent and other essential expenses if you lost your income?
- If you were unable to work, would you be concerned about your ability to make debt repayments on time (e.g., credit cards, loans, car finance etc.)?
- Would you find it difficult to pay an unexpected bill?
- Do you have any money left over for savings at the end of the month?
- How would you and your family’s lifestyle have to change if you couldn’t work?
If, after thinking through these scenarios, you do have concerns about your ability to pay essential expenses and debts if you couldn’t work, then it is highly advisable to have a protection policy in place.
The value of financial advice
If you are concerned about your ability to budget for protection insurance premiums, then please get in touch – professional financial advice could really help. I can help you organise your finances and identify any areas where you might be able to economise.
As with all insurance policies, conditions and exclusions will apply.
3 Moneybox, 2022