New research from Aviva has shown that the average British household may only have enough cash to cover bills for 14 days¹ if they or their partner fell critically ill or died. One in four (24%) of British households say they could only access £100 without further borrowing. (See Table one for more details).

The research shows that without further borrowing, the average British household could get their hands on only £914 of disposable cash, less than two weeks of the average weekly household expenditure of £471². This is less than 1% of the average Aviva critical illness payout of £78,707.

Alternative arrangements
The research shows that, should the worst happen, Britons are drastically under-insured with only 37% of households covered by life insurance or critical illness cover. Should they have to raise alternative income, one in five (19%) Britons would be willing to sell their home, while a third (31%) would give up their car. 

However, others say they would sell their TV (14%), the home computer (13%) or even their pet (6%) to raise cash – possibly indicating the extent to which people underestimate the financial impact of a critical illness or death. Perhaps unsurprisingly, men are less likely than women to sell their PlayStations (24% versus 16%). (See Table two for further breakdown). 

Responsibility
The majority of Britons (59%) consider it their personal responsibility to cover any loss of income, should the worst happen. This is more strongly pronounced in men, where 67% see it as a personal responsibility, versus 55% of women.

However, 17% of Britons see it as the government’s responsibility to cover any income loss due to a critical illness or death, and 9% would expect an employer to fill the gap. Individuals could expect a maximum of £95.15 a week³ from the Government Employment and Support allowance. A quarter (24%) of Britons say they would use their savings.

Louise Colley, head of protection for Aviva, said: “At Aviva we understand the huge impact that a critical illness or death can have on a family, both emotionally and financially. Money worries are the last thing a family would need at such a distressing time, so we would encourage everyone to take the time to consider life and critical illness cover to make sure they have adequate protection in place.

“The majority of British people see it as their responsibility to cover any loss of income in the case of them not being able to work due to a critical illness or death; but most simply don’t have enough money to see them through this period. It is worrying how little money Britons would be able to access without further borrowing, and how big the shortfall could be when we consider how much a critical illness or bereavement could actually cost.

“Currently, 31% of households rely on a sole breadwinner. Britons, especially those with dependants, should consider how they would cope should the worst happen. With the average Aviva critical illness payout currently standing at £78,707, and premiums for life and critical illness cover costing roughly the same as a Friday night takeaway for two⁴, it’s vital that people have cover in place, just in case.”

To find out more about life insurance and critical illness cover with Aviva, call 0800 068 5549 or visit www.aviva.co.uk/life-insurance.