New research from Scottish Widows shows that 30 million Brits have not protected themselves for the long term should the worst happen and they lose their household's main income and only a quarter believe they would be completely protected in this situation.
Research from Scottish Widows on 6,209 UK adults, shows that many people could find themselves without a safety net if the household lost its main income due to critical illness, serious incapacity or death. When asked how they would survive financially in this situation, 45% of Brits said they would use their savings if they or their partner were unable to work for 6 months or longer due to ill health and personal injury, critical illness or a serious accident and 42% said that on their death, their partner and family would have to fall back on savings to cope with the loss of an income.
However, the research showed that almost two thirds of people who plan to fall back on their savings in this situation only have between £500 and £1500 saved up - meaning that any reliance upon their savings would not last long. Two thirds also said that they are concerned about the effect the recession will have on their ability to save, a combination of inadequate savings coupled with a lack of protection could leave many seriously at risk.
Richard Jones at Scottish Widows says, "No matter what the economic climate, illness, accident or death can occur at any time. Taking out protection to meet your needs can provide a financial cushion when you need it most. The lack of protection coupled with peoples tentative approach to saving in the current difficult economic climate could result in families and dependents taking radical steps to make ends meet if illness, accident or death affects the household income."
The research shows that many people regard protecting themselves against the financial impact of illness as an extravagance as opposed to a necessity. More Brits think of their mobile as a necessity than income protection and if forced to cut back financially, nearly a quarter would cut back on their critical illness cover indicating that the nation's financial priorities may be skewed.
Critical illness insurance: News update: 11/07/2009