Money well spent?
Despite many being aware of the possibility of being hit by a serious illness, few have taken action to prepare for the consequences.
Many of us worry about being diagnosed with a serious health issue. Despite this, far too few of us do anything to help prevent it. For example, a recent study showed that eight million British adults fail to take simple lifestyle precautions to reduce the risk of developing cancer1.
Alongside the failure to adopt preventative measures like taking regular exercise, many of us fail to insure ourselves against the financial impact of serious illness. Just 8% of households have income protection and 11% critical illness cover2. The potential for physical and financial frailty is underlined by the fact that, each year, close to one million working people unexpectedly have to give up work because of injury or illness3.
In an effort to highlight the need for people to plan financially for the eventuality that they become too ill or injured to work, the 7 Families campaign has teamed up with Disability Rights UK. They are helping seven individuals who have been diagnosed with a serious illness and have no realistic financial safety net. A tax-free income for one year is offered to the person who has been forced out of work.
One of the people who was chosen is Graeme Snell. Until the summer of 2014, Graeme was a fit and healthy Hartlepool United fan. He worked full-time as an Advanced Health and Wellbeing Practitioner and described himself as being very fit.
In July of that year he had a double stroke and, although he hasn’t worked since, he has been described by medical staff as a “walking miracle”.
“There are some ongoing symptoms but overall I’m keen to return to work as soon as possible,” Graeme told the charity last year.
“The money from the project will help with day-to-day life. I would like to return to work in some capacity, which is why the rehabilitation and support also provided by the project could be so important.”
Individuals like Graeme, who did not have sufficient savings or insurance to replace the lost income, can find themselves in serious financial difficulties, such as arrears in mortgage, rent and other credit repayments.
But research suggests that two fifths of consumers have never even thought about what they would do if forced to stop working by a long-term illness or injury4.
Income protection can replace lost income when an individual is forced to stop work due to serious illness or injury. Some employers will provide a level of cover as part of their employees’ benefits packages, but there is no such provision for the self-employed, making this group particularly vulnerable.
Having income protection enables households to maintain income levels at, or close to, previous earned income if the main earner has to stop work due to ill health or disability.
Stories like Graeme’s are a reminder of the value of such protection; and while it is thankfully true that not everyone will experience a serious illness or injury that prevents them working for a significant period, none of us know if it will happen to us, or to someone in our family.
For more information on the 7 Families campaign, please visit www.7families.co.uk. Links from this page exist for information only and we accept no responsibility or liability for the information contained on any such sites. The existence of a link to a website does not imply or express endorsement of its provider, products or services.
1 www.aviva.co.uk, 21 January 2016
2 Family Finances Report, Aviva, August 2015
3 Welfare Reform for the 21st Century: The role of income protection insurance, Association of British Insurers, September 2014
4 ABI Quarterly Consumer Survey 2012 Q3, Association of British Insurers, October 2012