The latest Aviva Family Finances Report reveals that many UK families are putting luxuries ahead of protecting their loved ones financially.
The report discovered that while 50 per cent of families are happy to pay for a satellite television package, just 40 per cent have life insurance. It also found that families are more likely to have insurance for their mobile phone (14 per cent) than insurance that will protect their family financially if they were to suffer a critical illness (13 per cent).
Similarly, more people have taken out an extended warranty on electrical items (13 per cent) than have income protection insurance, which would potentially pay an income for life should they be unable to work as a result of an accident or illness (10 per cent).
Lack of understanding
The report also reveals that the majority of UK families are avoiding the issue of what they would do if something happened to an income earner because they find discussing their finances and mortality ‘uncomfortable’. This is in spite of the financial worries that could be caused by not having protection, exacerbating emotional distress at a difficult time. As a result, many families ignore the issue and fail to appreciate the value of protecting their family compared to spending on other items.
Avoiding putting measures in place
No one likes to dwell on poor health or mortality, but by denying that illness – or worse – is even a possibility, people are avoiding putting measures in place to protect their loved ones. Too many people assume that someone else will step in and look after their families if they weren’t there to provide for them, but the reality is very different.
People need to ask themselves just how they would pay for their mortgages, their food and all the other costs of living should they suddenly lose an income. While no one likes to think about ‘what ifs’, by not even considering these scenarios, people could be putting the future financial security of their families at unnecessary risk.
Source – The Aviva Family Finances Report is an in-depth study into the financial needs of the 84 per cent of the UK population who live as part of a modern family.
Data was sourced from the Aviva Family Index, which used findings from over 10,000 people who are members of one of the six groups of families identified above via Opinion Matters. This report is a definitive appraisal of the personal finances of families in the UK. Not only does it look at personal wealth, income sources and expenditure patterns, but also tracks how these change across the different types of family unit.