Coping with a crisis: ABI advice on protecting your financial needs

Coping with a crisis: ABI advice on protecting your financial needs

Coping with a crisis: ABI advice on protecting your financial needs

New research commissioned by the ABI shows that nearly a quarter of people have no idea how they would cope should they lose their regular income. Insurance can, however, play an important role in helping people to meet their financial commitments.

Statistics show that 23% of people will be jobless at some point during their working life. While unemployment is often short-term, more than one in three will be out of work for a year or more. With so many people juggling their debts to keep afloat financially, and with families relying on two incomes to get by, a period of unemployment often has a devastating effect on people’s finances. An economic downturn is likely to make the situation worse as more people would be affected and those that are, could take longer to get back to work.

Being out of work through illness can have even worse financial consequences. There are currently 2.4 million people in the UK with long-term illnesses who claim incapacity benefit.

The ABI has produced a factsheet highlighting the different types of protection products available that people can consider.

Nick Starling, the ABI’s Director of General Insurance and Health said:

“It is important when people are taking out a loan or a mortgage that they think about how they would meet repayments should they fall ill or become unemployed. Insurance can play a role in helping people meet their financial obligations in these circumstances.

“Buying the right insurance is essential. Don’t just pick the first one you look at, or the cheapest, but shop around to make sure it’s the right policy for your needs. Most people only think about buying insurance when they buy a house, take out a loan or start a family, so looking into insurance options before you make any big purchases is a good idea.”

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Notes for Editors

1. Enquiries to:
Alan Leaman 020 7216 7440 (Mobile: 07957 482 330)
Jonathan French 020 7216 7392 (Mobile: 07958 330 480)
Malcolm Tarling 020 7216 7410 (Mobile: 07776 147 667)
Erfan Hussain 020 7216 7411 (Mobile: 07712 841 184)
Kelly Ostler-Coyle 020 7216 7415 (Mobile: 07968 364 302)

2. The ABI commissioned NMG Financial Services Consulting to explore protection needs in the UK. The report finds that many people have no strategy in place to provide for themselves and their family should something happen that causes the primary earner to lose their income. The research shows that insurance can significantly improve the situation for households that experience a loss of income because of unemployment, illness, or loss of life. The full report can be found on the ABI web site, www.abi.org.uk.

3. There are four main insurance products that can help people should they lose their regular income: Life Insurance, Income Protection Insurance, Critical Illness Insurance and Payment Protection Insurance.

4. The ABI is the trade association for Britain’s insurance industry. Its nearly 400 member companies provide over 94% of the insurance business in the UK. It represents insurance companies to the Government, and to the regulatory and other agencies, and is an influential voice on public policy and financial services issues. ABI member companies hold up to a sixth of all investments traded on the London Stock Exchange, on behalf of millions of pensioners and savers.

5. An ISDN line is available for broadcasts.

Copies of all ABI news releases, together with other information from the Association, can be seen on our website http://www.abi.org.uk

07/08