It would be great if every one of us could live entirely risk and accident-free lives, alas that is not often the case, which is why various forms of life and incapacity insurance are critical to any wealth plan.
Every one of us should consider the substantial risks associated with being underprepared for unexpected life events, particularly those mundane accidents that could result in significant financial strain.
Recent findings from a study conducted by MetLife UK and Censuswide highlight a concerning trend among us Brits – the majority are not financially equipped to handle accidents.
Studying 3,021 UK adults, the research revealed that only seven per cent have accident or sickness cover in place.
This low number of policyholders is surprising given that 56 per cent of respondents reported injuries from common mishaps, and 32 per cent have suffered serious injuries.
The financial implications of such accidents are substantial. For example, individuals typically need at least £1,200 in savings to manage without their regular income during recovery. Yet, 15 per cent of those surveyed would require £1,500 or more to cover basic living expenses during such a period.
Despite these risks, the study found that many only consider the importance of financial protection once they are already in a crisis – needing to make a claim when it is too late.
It is concerning that while 62 per cent of individuals have some form of financial protection, such as life insurance, these solutions often do not cover short-term disabilities or accidents that can still have a debilitating impact on an individual’s financial health. Only a small fraction have specific covers that cater to these needs.
Financial advisers report that about a third of their clients recognise the benefits of traditional insurance products like mortgage and life insurance, yet many overlook the necessity of personal accident and sickness cover. This oversight can lead to severe financial difficulties when unexpected injuries occur.
In light of these findings, it is crucial to assess your current insurance coverage and consider whether it adequately protects against the financial impact of accidents.
If you would like advice on a range of financial protection options, please contact our team.