It’s all about the kids.

It’s crucial to keep family finances protected in case the worst happens

Early on in the year we were warned about eating toast that has been over-cooked and told we shouldn’t keep our potatoes in the fridge. When certain foods are cooked for too long, or stored at a certain temperature they can produce a chemical that scientists say can cause cancer. It reminded me of the news headlines from around 10 years ago when we were warned that eating too much bacon could cause cancer as well.

I also read recently that France has banned unlimited soft drinks. The government there is worried about the impact sugary drinks are having on younger people’s health and the number of people who are obese. No such ban is in place in this country, but I can see it happening. Remember, pre-2007 you could smoke in pubs, but looking back it’s sometimes hard to believe we were ever allowed to do that in the first place.

One other story that caught my eye was based on a report from the Royal College of Paediatrics and Child Health. It said that child health in the UK is falling behind that of many other European countries.

The report looked at a number of health issues affecting young children. Perhaps the most startling was that in 2014 the UK had a higher infant mortality rate (3.9 per 1000 live births) than nearly all comparable Western European countries. It was also found that one in five children starting primary school in the UK are overweight or obese.

It’s a pretty concerning situation. I mean, what really is more important than the health of our children? If a child’s wellbeing is already being compromised before they’ve started school then it’s not a great start in life. This isn’t parent-bashing. I know as well as the next person how hard it can be to get some children to eat well and not be glued to the TV or a tablet for hours at a time. But we do owe it to them to try as hard as we can to keep them fit and healthy.

Clearly a lot of the issues raised in the report are potentially preventable health conditions. But there are many cases of young children becoming ill through genetics or just pure bad luck. Children can be affected by things like cerebral palsy or spina bifida – debilitating conditions which put a huge strain on entire families, both mentally and financially. I believe group protection can help.

Whether a child’s health or wellbeing is caused by poor health, diet, or serious illness, the underlying message to us all remains the same. We have a responsibility to ensure our children are given every opportunity to have an active, happy and healthy lifestyle which stands them in good stead for later years.

Given the range of headlines on health issues that we’ve seen in 2017, it looks like it could be a pretty future..

£69 million in claims

AIG Life Limited announced it paid a total of £69 million in claims for life and critical illness insurance in 2016, helping almost 1000 families and businesses when they needed it most.

The figures represent an increase of over 49% on 2015 and show that 95% of life claims and 92.3% of critical illness claims were paid. The average size of claim paid was £75,493 and the average age of claimant was 54. The most common cause of death was cancer (42%).

Life claims

AIG Life paid out 95% of life insurance claims in 2016 totalling £46 million – more than double the £19 million it paid in 2015.

Critical illness claims

The average age of a critical illness (CI) claimant was 46 years old and the largest claim paid was £1.5 million.

The “key three” conditions suffered by AIG Life policyholders continue to be cancer, heart attack and stroke, along with multiple sclerosis, and these amounted to 83.5% of adult critical illness claims paid – consistent with the reasons for launching AIG Key 3 Critical Illness last year. Cancer made up 56% of CI claims.

Sadly, children’s critical illness conditions made up 10.2% of all claims, of which 44% were paid for open heart surgery, 19% were on diagnosis of a benign brain tumour and 11% were for cancer. AIG Life pays an additional 25% of the sum assured up to £25,000 per policyholder if a child has a critical illness. This can double to up to £50,000 if both parents hold separate policies, and should essential treatment not be available in the UK this can double again to £100,000.

In addition to the critical illness claims paid, 1 in 5 people also accessed AIG Life’s unique Claims Support Fund which pays up to £300 on top of the sums assured. This money was largely used to help claimants manage the cost of parking and travel costs when attending hospital appointments, to pay for childcare while they were in hospital, to pay for a cleaner while they were recovering from treatment, and to provide vocational courses so they can manage conditions when returning to the workplace.

Of all CI claims submitted, 2.8% didn’t meet AIG Life’s definition of the condition policyholders were claiming against and 4.9% were declined because of misrepresentation.

Commenting on the statistics, Debbie Bolton, Head of Claims and Underwriting Development, said: “AIG are in the business of meeting customers’ expectations to pay all valid claims, and we want to provide customers with as much backing as possible when life takes a terrible turn. When this happens, we offer them a full range of support services – from our already mentioned Claims Support Fund, to the independent worldwide second opinion medical service Best Doctors, the award-winning children’s bereavement charity Winston’s Wish and our recently announced Funeral Pledge. In doing this, so we can provide so much more than financial support.”

The Protection Gap

What it is, who’s stuck inside it – and how to climb out onto safer ground

Given the current financial strains on both our workplaces and our family lives, we are acutely aware that serious illness or loss of employment could have a catastrophic effect on our family’s financial security. But many of us don’t have the safety net of insurance cover – the life protection – that would ease this burden. This is what commentators mean when they refer to the protection gap: it’s the gap between those who know they have a glaring problem if anything happens to them (i.e. most of us) and those who do something about it (far fewer). Are you in the protection gap? If so, what’s stopping you from climbing out?

It’s not as simple as asking yourself if you have cover; the amount of cover is critical too, which is why in 2012 the Association of British Insurers was able to put a value on what it estimates to be the shortfall in cover: £2.6 trillion in the UK, a dramatic increase over the last decade.

The perfect time

There are several reasons why people overlook life protection. For some, their financial focus is on the short term: research from the independent financial research group Defaqto estimates that as many as 40% of us feel unable to consider the bigger, long-term picture because of our anxiety about how to cover immediate household expenses such as the mortgage, credit cards and loans. Even among people with savings, 60% admitted they could only survive financially for a maximum of up to six months if their circumstances were to change dramatically.

One of the ironies of the protection gap is that the perfect time to install a safety net against some of life’s unfortunate events is when we are young, fit and healthy – the exact time of our lives when it’s least likely to feel like a priority. It’s the best time to take out this form of insurance as premiums will be at their lowest, but by comparison, if you wait until you are older and more likely to have developed some health conditions, then premiums are likely to be much higher, if they’re available at all.

Complicated and expensive?

There are other reasons why there’s a protection gap, besides a fixation on the financial here and now. Many people believe any form of protection – life cover, critical illness cover and so on – is going to be complicated, or costly. This is where it helps to seek specialist guidance or advice that can unravel any complexities and cut through to what is right – and most cost-efficient – for you and your family.

For further information, please contact us on: 02890 020550 or email