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Can’t afford to be ill

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Can’t afford to be ill

New research reveals that 36 percent of people, should they fall seriously ill, would rely on their family for support, 70 percent would look to the state for nursing during their illness and 55 percent of people would take a lower paid job for better benefits.

Almost 70 percent of UK employees have made no financial provision for costs they may incur in the event of a critical illness reveals new research* from Canada Life Group Insurance. Indeed, nearly half of respondents (49 percent) said that in the event of a critical illness they would only be able to maintain their current standard of living for a maximum of six months. 

Despite the fact that only 19 percent of respondents had critical illness cover, a significant number of respondents (65 percent) were aware of what this sort of policy involved and its benefits. This increased awareness – combined with the popularity of Flexible Benefit platforms – has led to growth in the critical illness market in 2009 and this trend looks likely to continue into 2010.

However, while some people have taken proactive steps to protect themselves against the financial implications of a critical illness, many have not. Two thirds of respondents said they would fund the associated medical and financial costs either by simply dipping into savings (38 percent) or relying on financial support from their spouse or family (36 percent). 

Almost one in ten (nine percent) people had purchased mortgage payment protection and felt this would help them to meet their largest expense – however this is partial protection and they would still need to meet other bills. Shockingly four percent said they would be forced to take out a loan or credit card to pay for these costs and six percent said they would have to sell other assets.   

Despite the planned government spending cuts, the majority (70 percent) of those questioned said that they are relying on the state/NHS to provide care should they need nursing during their illness. In addition, 13 percent believe this will be provided by the local council and 35 percent said they would have to rely on their spouse. 

Despite this lack of financial provision, UK employees are becoming increasingly aware of the prevalence of critical illness amongst their family and friends.  According to ONS data* one in three people will develop cancer at some point during their lives and 80 percent of respondents said that cancer was the serious illness that people fear the most. 

As awareness grows amongst the UK population of the availability of different types of employee benefits, it provides advisers the opportunity to educate employers about products such as Critical Illness Cover. Employers can provide Critical Illness Cover on a lower cost per capita than if their employees were to take out individual protection themselves.

Research also demonstrated just how much employees value benefits. Over half (53 percent) of the respondents said that they would accept a new job without a pay rise if the benefits offered were better and 55 percent said that they would be prepared to take a lower paid job if it offered better benefits.

Paul Avis, Director at Canada Life Group, said: “Despite being the only area of group risk that grew in 2009, there is evidently still a need for providers and advisers to raise awareness of the benefits of Critical Illness Cover to the employers, and ultimately the employees, that we insure. “We believe that the research that we have undertaken clearly identifies employee enthusiasm for the product and so the challenge now is to maximise the opportunity this presents and support our advisers in gaining new group critical illness clients.”

6 October 2010

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