Two Thirds risk hardship by saving over protecting
Shocking new statistics uncovered by one of the leading life insurance providers, Scottish Widows has revealed that people are choosing to put money into savings rather than spending the money on critical insurance products, like life insurance, critical illness insurance and income protection cover.
The research by the company revealed that two-thirds of those surveyed were putting their families at risk, by choosing to save money over buying life insurance. According to their data 6% less people were now taking out life insurance than a year ago, despite the apparent changes which may increase the cost of policies in the next year or so.
Instead of buying vital insurance products like life insurance, customers are choosing to put any spare money they have in savings, with the number of people saving up 5% in the last year. Whilst savings are all good and well and should be encouraged, a very small number of those saving actually have enough money in place in their savings account to make any difference to their family if they were to lose their life, get critically ill or even lose their job.
60% of those surveyed revealed that their savings would not even last them six months if they were to lose their jobs, and roughly a third of those asked didn’t have enough savings to last them a month if they lost their main income.
Of the 5,000 individuals surveyed who didn’t have dependents, just 5% had life insurance and 11% had critical illness insurance.
Half of the total number of people surveyed revealed that their household relied on just the one income, which is worrying as so much relies on that one job staying in place. Around 20% of those asked added that they would have real difficulty paying their mortgage and paying household bills if they lost their jobs for a year.
Director of protection and annuities at Scottish Widows, Richard Jones explained, “Many do not have the provisions in place to support their families for any substantial period and even after just a month could be left with no buffer.
“It is at times like this that families need to do all they can to protect themselves in the event the unexpected happens.”