Shocking Stats Identified by HSBC

Only 7% of people in the UK who support someone financially have spoken with a professional adviser about long-term financial protection, according to new research by HSBC.  In the UK, 27% of the population who are supporting someone financially, have never had a conversation with anyone about long-term financial security should something happen to them, not even friends and family. 

Despite a reluctance to seek professional advice regarding financial protection for themselves and their family, 74% of UK respondents rated their family’s health and wellbeing as the most important thing to them for the future.

 HSBC’s chief executive officer for UK Insurance Mark Hussein said: “Life carries many risks which can put people’s financial security under pressure, especially for those supporting someone. While it’s understandable that many people don’t want to talk about how their families would manage without financial protection, it’s an important conversation to have.  “We feel that advisers play a vital role in helping customers look at what they have achieved so far in their lives and then advise them on how they can protect it.”

The question is, have you had that conversation with an adviser?

A New Type of Income Protection Plan. Would It Suit You? …Read On

Aviva has launched an income protection plan covering basic living costs that could help the self-employed and contractors.  The insurer’s Living Costs Protection product provides a monthly fixed benefit of between £500 and £1,500 to cover outgoings such as a mortgage, rent or bills if an individual cannot work due to illness or injury.

There is no limit to the number of claims a customer can make, and the payment period runs for up to 12 months for each individual claim.

Aviva will not conduct a financial assessment or apply deductions at the claim stage, and the customer will receive their selected benefit amount once Aviva has accepted their claim.  

Living Costs Protection could help with fluctuating incomes such as the self-employed and contractors, where the income-based benefit calculation required for traditional income protection at both point of sale and claim can be complex.   In addition, it could provide a more affordable option for those in higher-risk occupations.

In addition we are all living longer, and one thing we may have is time off work with illness which could prove disastrous to family income.  According to the Chartered Insurance Institute, a million people a year in the UK suffer a prolonged absence from work due to sickness, which can result in financial hardship – yet Aviva’s statistics show only 8 per cent of UK families hold some form of income protection.

This could be particularly attractive to the self-employed, who have a greater need than most for income protection given they have no extra support from an employer.

Will your family suffer if you die?

Only 7 per cent of people in the UK who support someone financially have spoken with an adviser about long-term financial protection, according to research.  The findings were a part of a global study by HSBC which quizzed more than 13,000 people across 13 countries to look at levels of financial security.

The analysis found 27 per cent of UK respondents supporting someone financially have never had a conversation about long-term financial security should something happen to them – not even with friends and family.  This compared to 22 per cent globally.

But unexpected life events can have knock-on financial consequences for the whole family and 81 per cent of people in the UK said their family would not manage well if they had to significantly reduce their support to them. 

Based on the research findings, HSBC has now identified four actions which can help people better prepare their family.  This includes 1) identify your priorities, 2) assess your finances, 3) plan for the whole family and 4) discuss what the family’s needs are for the future.

The figures from this research are frightening.  Many people seem to be lacking even a basic level of financial protection whilst at the same time are seemingly happy to spend hundreds of pounds a year on what some might be deem to be luxuries, such as, mobile phones and satellite TV.  People try not to think about the possibility of serious ill-health or early death, or tend to think that these things only happen to ‘other people’, but that’s simply not true.

How protection can save Christmas

Imagine the scene – in the build up to the busiest time of year at Santa Corp. offices, Santa Claus has slipped on the ice and suffered a serious injury.

He’s desperate to get back to work, but the orders from Doctor Elf are firm – no work for at least a few months.

The preparations for Christmas were well on their way. The present wish lists collected, the reindeers fed and trained. But was the North Pole ready for this spanner in the works? How can Christmas be saved now such a key member of staff is out of action?

Unfortunately, injuries and illnesses are a part of life. They can come unexpectedly and could have a significant impact on our work, family and wider circle.

Below are a few things that we can all learn from Santa’s unfortunate tumble to ensure we are prepared should the worst happen:

Consider insurance

UK employees who are too ill to work are entitled to Statutory Sick Pay, which is £89.35 per week for up to 28 weeks. However, since some injuries or illnesses can result in a longer period of time away from work it’s important to consider how you’d cover basic living costs and also Statutory Sick Pay is unlikely to cover any unexpected bills or payments.

Income protection insurance could have helped to reduce unnecessary financial concern during an already stressful time for the Claus family. This type of insurance provides financial cover, in the form of a monthly payment, when someone is unable to work due to injury or ill health. Our Research for one Company’s ‘State of the Protection Nation’ report earlier this year found that just 4% of adults surveyed have an income protection policy. This means many people could be financially exposed should they be forced to take time off work due to illness or injury.

Consider their dependents

Santa’s injury means he cannot walk, and so Mrs Claus may have to take time off from looking after the reindeer and supervising the elves to care for her husband. If a family member or close friend has to take time off work to care for your client, this will increase the financial pressure on their family. With these knock-on effects, it’s even more essential that Santa has plans in place to ensure he and his family are protected and can afford to continue paying the costs of day to day life in the North Pole.

Critical illness research showed that among people who have cared for someone with an illness, more than half (54%) had to take some time off or reduce their own working hours as a result. It’s important that your clients consider not only the financial implications of being ill and unable to work, but also how they’ll manage the everyday tasks they may no longer be able to carry out.

Make plans for your business

Santa is self-employed and runs his own (non-profit) business. With Santa written off for a few months, the success of the company depends on who can step up to the plate and fill Santa’s boots.  New business protection research shows that over half of all British SMEs don’t protect their businesses against the loss of a key employee – mainly through lack of awareness.

Key Person Income Protection covers this situation by providing a monthly income while the key employee is unavailable to work and offers support in the search for a replacement. Santa is unique, and unlike other organisations does not have the luxury of a readymade replacement waiting in the wings. The elves are diligent workers, and toy-making experts, but none have passed their sleigh driving exam and the sight of a chimney fills them with dread. With the proper insurance in place the toy factory would be able to continue and the elves would have support in their search for a (hopefully temporary) replacement.

As we know, the Claus family are normally meticulous planners – every detail of Christmas is planned months in advance and Santa delivers the presents on a strict house-by-house timescale. However, even if you drive a magic sleigh there are always things that can go wrong, and our health is no exception.

If this blog strikes a chord, don’t hesitate to gives a ring or drop us an email.