Two Thirds in Financial Shock Zone

Two Thirds in Financial Shock Zone.

The Money Advice Service (MAS) has released research that it commissioned in connection with how many people will face financial difficulty if they are unable to work due to serious illness or injury.

Their research suggests that:

• 65% of the population does not have any form of insurance protection in the event of death, serious illness, redundancy or injury.

This means that just under 7 out of 10 people have no protection and just over 1 in 3 have any protection at all and even then it may be inadequate.

They marketed their research as "mind the gap" and this is a theme that we have used on this website previously.

• 18% of the population knows someone that has suffered serious illness or injury or has been unable to work for a sustained period in time.

That is a staggering 1 in 5 people know someone who has faced financial hardship.

People never plan to fail but many fail to plan.

You need to ask yourself some serious questions about how you would cope as an individual or as a family with the financial shock of being unable to work or indeed how your loved ones would cope if you passed away.  Just this week, we published an article on how the benefits system is changing and the support that you will receive for example with mortgage payments if you were unable to work is being dramatically reduced.

MAS suggests that the top reasons for not taking income protection insurance include:

• Can’t afford it – 28%
• Not considered it – 17%
• I have no one dependent on me – 11%
• I would rather have the spare cash now – 10%
• I don’t think I’ll lose my job – 10%

Getting our financial priorities right.

Take some time out this weekend to think about your priorities.

Compare how much you pay for motor insurance or your travel card each month against how much you spend on life insurance, critical illness insurance and income protection/replacement insurance.

• How much do you spend on eating out or takeaway food?
• How much do you spend on your car loan?

This puts it into perspective that without your ability to earn or if you have significant debts both you and your family would be unable to cope with a financial shock.

Planning for financial shocks.

We have long campaigned on this website to make people more aware of the frequency of death, serious illness, redundancy and injury.

Watch our video: Insuring a Treasure Chest

Use our calculators:

• Partner's Worth Calculator - How much should you pay your partner?
• Critical Illness Calculator
• Health Insurance Calculator
• Life Insurance Calculator
• Key Person Calculator - How valuable are you to your boss?

Contact us for help and advice for your insurance protection needs.