There is no doubt about it – if you do not cover yourself against what could happen there is no guarantee that you and your family would keep your home should you get ill or even die.

New research by Friends Provident has found that nearly half of people in the UK have no insurance in place to cover loss of income through illness or death of a breadwinner and even those that have considered taking some action would be underinsured by an average of £14,500 per year.

Not being able to pay the bills means you could default on your secured loan repayments and your mortgage repayments. This could eventually lead to the lenders taking your home – all because you were not covered in the case of a loss of earnings.

Alarmingly, a third of people told Friends Provident they could live on less than 35% of their take home pay if they were unable to work through illness or injury. Based on an average weekly income of £489, that means they would have a maximum income of £171 per week – not enough to pay the bills and to be sure you and your family are safe.

Ed Stuart-Brown, head of protection sales at Friends Provident says: “Imagine being told that you had just been given a 66% cut in your income – the impact of that for most people would be catastrophic. It’s time people took control of their future and looked at this in a responsible way, instead of burying their heads in the sand, especially in today’s environment. Ignorance is not bliss, it’s irresponsible.

“It’s a sad fact of life that the unthinkable can and does happen and the last thing you would want is to leave yourself or your family in dire financial straits. And it’s too late to do anything about it once illness, accident or death occurs. If you are fit and well now is the time to act – the cost for most people is a fraction of the potential benefits they could receive and it’s a simple matter to review your needs with your adviser.”

SOURCE: Friends Provident, 02/03/10

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