I know how much people love their pets (and how much it can cost to pay vet fees). I also know how much it costs to buy the latest mobile phone and so I understand why many of us choose to take out pet and phone insurance –18% of UK adults for each type of insurance according to the results of a recent survey conducted by Aviva.

What surprises me is, far fewer people choose to protect themselves (than their pets or phones) in the event of critical illness (10%) or cover themselves just in case they should find themselves unable to work due to illness or injury (8%).

Aviva’s report suggests that unexpected loss of income is sadly much more common than people might think - with 27% of people surveyed experiencing a loss of income due to ill health, serious illness or death.

The analysis went on to explore the finances of families with dependent children and stated that nearly half (45%) would last less than a month if they had to replace their income with savings and investments and did not make any lifestyle changes – so they would not be able to support their current lifestyle for more than a month if they lost an income due to illness.

The reality of dealing with financial loss.
The experiences of families who had sadly encountered an unexpected loss of income due to ill health were also described. Around one in three (35%) received support from the government and a similar proportion said they tried to deal with their circumstances by cutting back on ‘luxury spending’ for their children. 17% said they had to turn to a family member to help them out.

Most worryingly, 19% sold their home to either downsize, move back in with family or rent or became homeless as a result.

One in four families (26%) who had gone through this experience said they recovered within two months. However, the recovery process took more than a year for 22%.

Having a plan for dealing with a loss of income and having insurance were both factors which were found to noticeably boost families’ chances of recovery financially within a year.

The reality of facing an unexpected loss of income through ill health of a parent can cause real financial hardship for families. No one likes to think about the possibility, let alone talk about such matters. However, the reality is that if more of us did, the greater the chance that we’d be better prepared financially to get back to normal within a shorter time frame.

Income protection is a policy designed to replace a proportion of your income if you can’t work and suffer a loss of earning’s due to illness or injury. Critical illness cover is a policy that pays out an agreed cash sum if the person covered is diagnosed with a critical illness as defined by the policy’s terms and conditions.

Such payments can relieve the financial burden of a loss of income due to illness or injury so that you can concentrate on getting better - with the hope of getting your situation back to normal quickly.

For further advice and to discuss the options to protect your future, our advisors are on hand to help. Contact us on 0800 612 8005 for a no obligation conversation.

Credit: Aviva. Protecting our families, March 2017.