If ever there was a country that needed to look to the future…

Monday, March 1, 2010

It is easy for a country such as ours to disregard the future when it comes to financial well being. When one takes a look at the credit crunch it seems that we, on mass, all decided to do this. With a unifying view that the good times had to last forever we just kept borrowing money hand over fist. This is nothing but extremely short sighted when looking at life and critical illness insurance.

Let’s face it, we are all going to die someday. Then why is it that the average British householder has enough money to survive for only two weeks should something terrible happen. In a survey by Aviva of 1,000 people it was shown that in the event that they were to lose their income due to death or critical illness, the average person surveyed could access only £914. This is less than half of the average two week household expenditure. Furthermore another one quarter could acces only £100 per week. It doesn’t really seem as though we are preparing for the future. How is it possible that two thirds of Britons polled did not have some sort of life or critical illness in place while the same study showed that 59 percent of people did think it was their responsibility to fill the income gap if something were to happen. It seems idiotic that 24 percent of people polled said they would use their savings should something happen when obviously we just don’t have any savings.

Let’s take a few words of wisdom from Louise Colley, the Head of Protection for Aviva when she says, "The majority of British people see it as their responsibility to cover any loss of income in the case of them not being able to work due to a critical illness or death; but most simply don't have enough money to see them through this period. It is worrying how little money Britons would be able to access without further borrowing, and how big the shortfall could be when we consider how much a critical illness or bereavement could actually cost. Currently, 31% of households rely on a sole breadwinner. Britons, especially those with dependants, should consider how they would cope should the worst happen. With the average Aviva critical illness payout currently standing at £78,707, and premiums for life and critical illness cover costing roughly the same as a Friday night takeaway for two, it's vital that people have cover in place, just in case."

Sophie Henderson