The importance of insurance in case of emergency
SOME news from Sweden this month made me wonder how well, or how badly, we look after our health and our wealth here in Northern Ireland.
The Swedish, well-known for their forward thinking in matters of lifestyle and wellness, have introduced the world's first mental health ambulance, known as the Psychiatric Emergency Response Team. In a specially converted ambulance, stretchers have been replaced with comfortable seats, warm lighting and a relaxing atmosphere, and the team is made up of two mental health nurses and one paramedic.
The team answer an average of 130 emergency callouts in Stockholm each month, most of which relate to suicidal risk and would previously have been handled by police.
Well, back here in this neck of the woods, we aren't quite as far on in looking after our health as yet, and we are certainly not well advanced in preparing for the financial consequences of a health setback.
Our health and our wealth cannot be separated, they are inextricably linked, when you consider that the loss of your health can mean the loss of your income, if you have to give up work.
The Association of British Insurers (ABI) say that most (60 per cent) working families would lose a third of their family income if the main earner had to stop work, and for 40 per cent of families household income would actually be halved. However, the average worker has only enough in the bank to keep their household going for 32 days, if they lost their income, according to research by the insurer L&G.
Of course, it's not just ourselves who could suffer, if we were to lose our income. Insurances designed to protect us financially from a major health setback come under the umbrella of ‘family protection' products. Those words really do hit the nail on the head, because if you lose your income, it's not just you that crashes - the whole family is plunged into financial jeopardy.
The situation appears to be particularly critical for mothers, and some great research has been done on this recently by Scottish Widows. A third of mums admitted their household would be at risk if they lost their income, and a quarter said they'd be unable to pay their mortgage after three months, and would use up all their savings to even get that far.
Despite that, only 13 per cent of mums have covered their health by taking a critical illness insurance to pay out a tax-free lump sum if they had to give up work for health reasons - and life insurance is held by only two out of five mums, to shelter their family if the worst were to happen.
Many more people, both men and women, have a standard life insurance policy than have a critical illness policy. However, the figures show that you are much more likely to stop working due to a health setback, rather than death, before reaching retirement age.
There are seven million people in the UK at high risk of a heart attack, due to having heart and circulatory disease - but we're a lot safer than we used to be. Due to medical advances, seven out of ten of us will now survive a heart attack, compared to just three out of ten fifty years ago.
This is great news, of course, but it does show that critical illness insurance is just as essential as life cover these days. If you survive a heart attack, you will need months, maybe even years to recover, and a critical illness policy designed to pay off your mortgage, for instance, would take one major worry off your mind, at an otherwise very stressful time.
MacMillan Cancer Support also quote figures from the National Statistics Office to tell us that more than half of us will suffer some form of cancer during our lives – and if you are thinking that you're too young, and that critical illness is an older person's problem, it's worth knowing that the average age for claims is just 47.
Is it time for you to think about insuring your family's financial wellbeing, by insuring yourself against an unexpected health setback?
:: Michael Kennedy and Shaun Doherty are independent financial advisers and pensions specialists, and can be contacted on 028 71886005. Further information is on the Facebook page 'Kennedy Independent Financial Advice Ltd' and the website www.mkennedyfinancial.com