Working with clients we find people who either have no life assurance or very little. People often hope either that the worse will never happen within their family or that the state will provide for them if a key earner within the family dies. However, real life can be very different.
A major UK insurance company recently undertook a survey* to discover the financial implications of how a death in the family (of the main bread winner) might affect family finances moving forward.
Understanding these potential implications on their family is a major driver to our clients’ requirements for life assurance cover. At Premier Choice Healthcare we discuss this kind of issue with prospective clients to ‘paint a picture’ of their requirements if the worst should happen.
The survey’s findings were both surprising and to be frank a little disturbing.
On average, with no other income to support them, people in the UK only have 19 days worth of money before their savings run out. Without some form of prior life assurance planning, most people fall back on their savings, or rely on government handouts.
State benefits can assist in this situation, but are very limited in value.
- State Sickness benefits are quite low and end after a set number of weeks (currently State Sickness Payments, ‘SSP’ are available for a maximum of 28 weeks).
- The Widowed Parents Allowance of £ 105.95 per week (if you are under state pension age). This ends should you re-marry.
- A lower bereavement allowance for over 45’s with no children (only payable for 52 weeks and ranging from £31 to £105 per week depending on personal circumstances).
- In addition a one off bereavement payment of £ 2,000 may be available.
If death occurs with no life assurance in place the remaining family would struggle to manage on a monthly state supplied income of a little over £ 400. So the bottom line is that if you have no life cover, or a limited amount maybe to just cover your mortgage, then your financial portfolio is lacking. Married clients with young children owe it to their family to ensure their life cover is sufficient, and thus remove the need to rely on savings or the meager offerings from the Welfare State should the worst happen.
All it takes to give you peace of mind is for you to review your finances and put the right cover in place with the help of Premier Choice.
*Survey Data from the L & G ‘Deadline to the Breadline report 2012