With the excellent healthcare facilities available across Europe and the advancements in medical technology that are occurring all the time, people are, in general, living a lot longer which highlights the protection gap.
By 2037, the number of people in the UK over 75 is expected to double. The UK Commission for Employment and Skills (UKCES) also says that companies could potentially have four generations of the same family working for them by 2020, at which time people in their mid-50s will represent the largest age group of workers.
While longevity is a good thing, it inevitably presents health challenges for many and that’s a fact which means more people should be making arrangements for their later years.
Attitudes to Social Care Responsibility Unchanged
According to research by Swiss Re back in 2012, individuals cited the state as having the largest responsibility when it comes to the provisioning of social care for the elderly. It was acknowledged, though, that the burden of responsibility would shift over the next 10 years to the individual themselves and/or their employer.
However, three years on and the Zurich-based company says that attitudes are showing no signs of changing and that people still believe the state is responsible for their old age care.
This is highlighted by more recent research from Swiss Re earlier this year, which found most Europeans don’t have suitable provisions in place to cover them having a sudden disability or critical illness.
The survey of 13,000 individuals across 13 countries in Europe and the Middle East found that only one in 10 people can confidently say their families would remain well-positioned financially if they were to experience an unexpected shock to their health or life.
The situation in the UK, unfortunately, makes for equally grim reading, with just 11% of families having critical illness cover and only 8% having income protection, as outlined in our post at the end of August.
A Growing ‘Disability Income Protection Gap’
In their report earlier this year, Swiss Re quantified the “disability income protection gap” – a shortfall estimated at €750 billion (£521 billion). The gap is calculated by taking the figure required to replace 60% of an individual’s income should they become ill or injured and assessing it against the support available through private, employer and/or state funds.
“Although people in the survey were aware of the potential shock that a sudden disability or illness could have for them financially, there are still many people without enough protection and who are reliant on state welfare,” says Bruce Hodkinson, Swiss Re’s European Head of Life and Health Reinsurance.
“However, states are reducing their welfare systems as ageing populations and increasing medical costs put pressure on their budgets. The insurance industry has the task to enable the shift from state provision to individual responsibility.”
With people now expected to live longer, it is inevitable that the responsibility to make provisions for one’s care and their financial security will fall on the individuals themselves as the state’s social provisioning becomes unsustainable. Premier Choice is keen to ensure all its clients have suitable protection in place for all the “what ifs” in life.
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