Aviva's first Family Finances Report reveals that 93% of families do not feel they have adequate financial protection. On average a staggering 61% of families confessed they do not have even basic life insurance, with 87% saying they are without critical illness cover, and 89% without income protection.
The family unit most likely not to have protection insurance is single parent families who are also the most likely family unit to feel financially vulnerable as a result of being under/unprotected. 76% of single parent families and 68% of divorced parents with two or more children said they felt financially under/unprotected.
These findings were revealed in a new quarterly report that examines the finances and concerns of the 84% of the population who live as part of a modern family. The first issue of the Aviva Family Finances Report finds a disturbing 42% of families admit they have been seriously affected by illness and yet still do not have any protection insurance in place.
The seriousness of this situation is highlighted by the fact that of those families who have been affected by illness, 25% of families testify they have already experienced what it is like when one of the main breadwinners is unable to work due to illness. A further 15% have seen a family member unable to work due to stress/depression/mental health issues, and 7% say they have witnessed a family member give up work to look after another family member.
With the report also finding UK families rely on salaries for 75% of their income, it serves to highlight how vulnerable many families are to external financial shocks such as redundancy, illness or death; especially as 33% of families say they have no savings and 40% of families saying they save nothing each month.
19% say they have not bought life insurance because they thought it was too expensive and they cannot afford it, while 5% believe it never pays out and therefore is not worth buying. Aviva's own data shows life insurance costs from as little as £5 a month and 99% of its life insurance claims are paid out. The average sum paid out on a life insurance claim by Aviva is £51,000.
Aviva has just launched a high profile TV advertising campaign to encourage families to think about taking out life insurance.
Louise Colley at Aviva comments, "Life insurance and income protection can provide families with financial peace of mind in the unfortunate event of a sudden loss of income, and critical illness insurance can provide a lump sum cash payment should the insured suffer serious illness or disease. By making sure they have financial protection in place, families can have invaluable peace of mind for a more financially secure future."