UK: Families fail to protect loved ones as they avoid difficult conversations

25 Jan 2012

  • More families have satellite television (50%) than life insurance (40%)
  • Sex is only topic of conversation more taboo than finances for UK families
  • Booking a summer holiday is more of a priority in 2012 than taking out life
    insurance

UK families are putting luxuries ahead of protecting their loved ones financially, the latest Aviva Family Finances Report reveals today.

The report discovered that while 50% of families are happy to pay for a satellite television package, just 40% have life insurance. It also found families are more likely to have insurance for their mobile phone (14%) than insurance that will protect their family financially if they were to suffer a critical illness (13%). Similarly, more people have taken out an extended warranty on electrical items (13%) than have income protection insurance, which would potentially pay an income for life should they be unable to work as a result of an accident or illness (10%).

Lack of understanding
The report also reveals the majority of UK families are avoiding the issue of what they
would do if something happened to an income earner, because they find discussing their finances and mortality ‘uncomfortable’. This is in spite of the financial worries that could be caused by not having protection, exacerbating emotional distress at a difficult time.

More than a quarter (27%) of families admitted they would not want to discuss their debts with their family, and 24% would not even discuss their general finances. The only topic that makes families more uncomfortable than finances is ‘sex’ (56%).

Prioritising protection
As a result, many families ignore the issue and fail to appreciate the value of protecting their family, compared to spending on other items.

Looking at the monthly sums paid for different products and services, families pay almost double the amount for satellite TV than they do life insurance (see table below), and they pay only a small amount less for mobile phone insurance, regardless of the huge difference between what these plans are worth in the event of a claim. Despite this, 27% of families said they thought a satellite TV package was worth spending money on, compared to just 3% who said the same about a life insurance policy.

Families questioned for the Aviva Family Finances Report said they paid the following average amounts each month (January 2012)

Satellite TV package £35.75
Life insurance £20.88
Critical illness insurance £20.72
Home internet package £18.89
Income protection insurance £18.67
Pet insurance £16.60
Mobile phone insurance £12.33

  

  

  

  

  

 

 

 

Families plan to get their finances in order
The impact of inflation, pay freezes, and benefit cuts has caused UK families to reevaluate their financial priorities for 2012, and the two most important measures they plan to take this year are cutting back on their spending (39%) and paying off their debts (35%).

However, there is still a lack of understanding about the value of protecting their families financially, as more families are prioritising booking their annual holiday (21%) than are planning to buy life insurance (3%).

Louise Colley, head of protection sales and marketing, Aviva, says: “No-one likes to dwell on poor health or mortality, but by denying that illness - or worse - is even a possibility, people are stopping themselves putting measures in place to protect their loved ones. Too many people assume that someone else will step in and look after
their families if they weren’t there to provide for them, but the reality is very different.

“People need to ask themselves just how they would pay for their accommodation, their food, and all the other costs of living, should they suddenly lose an income. While no-one likes to think about ‘what ifs’, by not even considering these scenarios, people could be putting the future financial security of their families at unnecessary risk. So many customers report feeling ‘peace of mind’ when they take out life cover, knowing their affairs are in order, so we’d urge families to overcome their taboos and put protection in place.”

To find out more about life insurance from Aviva, customers can visit
www.aviva.co.uk/life-insurance or call 0800 068 5549.

* The Aviva Family Finances report is an in-depth study into the financial needs of the 84% of the UK population who live as part of a modern family. Based on customer profiles and Government data Aviva has recognised the six most common types of modern family as:

  • Living in a committed relationship with no plans to have children
  • Living in a committed relationship with plans to have children
  • Living in a committed relationship with one child
  • Living in a committed relationship with two or more children
  • Divorced/separated/widowed with one or more child
  • Single parent raising one or more child alone

Methodology:
Data was sourced from the Aviva Family Index which used findings from over 10,000 people who are members of one of the six groups of families identified above via OpinionMatters. This report is a definitive look at the personal finances of families in the UK. Not only does it look at personal wealth, income sources and expenditure patterns but also tracks how these change across the different types of family unit.

In addition to the regular data, each quarter a spotlight will be shone onto a different relevant topic. This issue has a focus on how families are failing to protect their loved ones financially, by avoiding thinking about "what if the worst were to happen?".

Download The Aviva Family Finances Report - January 2012 (PDF 2.65MB)

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If you are a journalist and would like further information, please contact:
Sarah Poulter 
Aviva Press Office 
Telephone: +44 (0)1904 452828 / +44 (0)7800 691569 
Email: sarah.poulter@aviva.co.uk

Lee Blackwell / Ben Marquand / Emma Beresford 
The Wriglesworth Consultancy 
Telephone: +44 (0)20 7427 1400 
Email: aviva@wriglesworth.com


Notes to editors:
Aviva is the world’s sixth largest* insurance group. We provide 44.5 million customers with insurance, savings and investment products with total worldwide sales in 2010 of £47.1 billion**.

We are the UK’s largest insurer with over 14 million customers. Our combination of  life, health and general insurance is unique in its scale and breadth in the UK market. Customers can choose to buy our products through intermediaries, our corporate partners or from Aviva direct and we have become the partner of choice for many of the UK’s biggest organisations.

We are ranked as one of the UK’s top ten most valuable brands and Aviva Plc are in the top 10% of socially responsible companies globally in the Dow Jones Sustainability World Index. In 2010 we invested £4.3m into our communities in the UK, which included 1,500 Aviva volunteers giving 24,000 hours for good causes. In addition, our employees gave £600,000 through fundraising and donating. Read our corporate responsibility report at www.aviva.com/2010cr.

Aviva is working in partnership with Railway Children through the Aviva Street to School
programme to get children living or working on UK streets back into everyday life. Find out more at www.aviva.co.uk/street-to-school.

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*based on gross worldwide premiums at 31 December 2010.
**at 31 December 2010.