Would you be able to pay your bills if you were off work ill for an extended period?
That’s a question that one of the country’s leading insurers recently asked a sample of 25- to 44-year-olds. In their Fuel for Life report, LV= examined whether younger people were financially resilient, and whether they would struggle financially if they were sick.
Read on to find out more about the results of this research and discover some recent LV= case studies that demonstrate just how valuable protection can be.
Almost half of workers “not confident” they could financially cope if they were ill
As protection experts, we work with dozens of the UK’s leading insurers to help you find the best price and most appropriate cover for your needs.
As well as household names such as Aviva, Legal & General, and Scottish Widows, we also work closely with LV=. In their recent Fuel for Life report, LV= looked at what the effect of a period of serious ill health would mean to a 25- to 44-year-old.
The research highlights just how many people aged between 25 and 44 would struggle financially if accident or illness stopped them from working.
LV= found that just under half (45%) of 25- to 44-year-olds without a protection policy are not confident they can financially cope if they fall ill. Over a quarter (28%) of workers in this age group say they would struggle to pay household bills if they were unable to work for two months or more.
Half also say their partner relies on their income, and they need both incomes to cover their monthly outgoings.
Mike Farrell, protection sales director at LV=, said: “The cost of living crisis will continue to be a challenge that many of us face for some time to come as the UK navigates through difficult economic conditions.
“Our research shows that 3 in 5 people without a protection product would feel more financially resilient if they had a policy that paid if they were unable to work due to illness or injury.
“That is why is it so important for people to […] find a protection policy to protect people and families…”
The safety net might not be sufficient for your needs
If you were off work for a period of two months or more, where would your income come from?
- You may receive some sick pay from your employer. However, many employers will pay full pay for a period, and then reduce the amount to half your salary or less
- If you don’t receive sick pay, or your employer only pays sick pay for a limited period, you may then be reliant on Statutory Sick Pay (SSP). In 2022/23, SSP is just £99.35 a week.
- If you are self-employed, you may not receive any support at all. Often, if you can’t work, you won’t get paid, and your income can dry up completely.
In any of these circumstances, it’s worth considering whether you and your family would be able to maintain your regular commitments such as mortgage or rent, and bills.
This is especially true as LV= found that 1 in 2 people say they rely on both their and their partner’s income to cover their monthly outgoings.
If you’re worried about how you’d cope financially if you were off ill for an extended period, it’s time to think about putting the right protection in place.
Benefit from the safety net of a tax-free lump sum if you’re seriously ill
Imagine if you could rely on a tax-free lump sum if you – or one of your children – was diagnosed with a serious illness such as cancer, multiple sclerosis, or a heart attack.
You could use this money to pay your commitments while you focused on your recovery, or if you had to take an extended period off work to recuperate. You could pay off some or all of your mortgage, and meet the additional costs that individuals often face when diagnosed with a serious condition.
Critical Illness cover provides valuable financial support if you’re diagnosed with a serious illness covered under the policy.
LV= say that the most common reasons they pay claims under this type of protection are:
- Heart attack
- Total permanent disability
- Multiple sclerosis
LV= say that the average age of an individual making a Critical Illness cover claim in 2022 was just 48 years old, and that the youngest payment they made was to a 22-year-old diagnosed with non-Hodgkin’s lymphoma. The highest payout was £400,000.
Some examples of just how valuable protection is
Here are a couple of real-life examples from LV= as to just how beneficial the right protection can be.
Milo (name changed for anonymity) was diagnosed with a severe mental health issue, impacting his long-term financial future.
Milo's partner contacted LV= to let them know that Milo had been ill since summer 2021. He was being treated as an inpatient for severe mental health issues and so had been unable to work. Despite treatment, he had not improved and was absent from work a year later.
His diagnosis met the criteria for claiming under “severe mental health” which was one of the conditions covered by his policy.
LV= were able to pay his claim of £400,000 and also highlight the invaluable emotional and practical support through his policy to help with symptoms.
Rich and Laura’s story
Rich and his partner had a baby girl called Laura (names changed for anonymity) in March 2022. Not long after Laura was born, the parents were told she had Down's Syndrome.
After receiving a medical report that confirmed diagnosis, LV= paid £35,000 under the “enhanced children's Critical Illness cover” part of their plan.
The policy continues to cover both him and his other children.
More than £1 billion paid to support individuals and families in 2021
Critical Illness cover provides valuable financial support to individuals and families every year.
The Association of British Insurers (ABI) reports that, in 2021, insurers paid 16,845 Critical Illness claims, totalling more than £1.1 billion. The average claim was £67,011.
As far as LV= are concerned, between January and September 2022 they paid more than £20 million in Critical Illness cover claims. The payouts supported more than 258 people after they received a life-changing diagnosis, including 14 child Critical Illness cover cases with claims totalling £360,000.
We’ll help you to find the right protection for you
If you want the safety net that you’ll receive financial support if you’re seriously ill, we can help.
We’re Critical Illness cover experts. We work with dozens of the leading insurers in the UK to help you find the right quality cover at the most competitive price.
Our quick and simple online tool generates instant quotes from a wide range of leading insurance providers – you can compare prices in just a few minutes.
We’re also rated five-star based on independent customer feedback, so you can be sure you will benefit from superb service from an expert you can trust.
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