When Tribunal proceedings are contemplated, employees will often make a Subject Access Request...
What...or whom...do we need to protect?
We insure our homes, our cars, our phones and our holidays but sometimes we forget to insure ourselves.
In a survey carried out by Bright Grey, nearly 2,000 people were asked what they insure. Home contents insurance (84%), car insurance (78%) and travel insurance (38%) featured higher than health insurance, such as critical illness cover (18%).*
So what do we need to protect?
Mortgage - many people take out life assurance to ensure their mortgage is repaid.
Main breadwinner - life assurance and critical illness cover is often taken out for the main breadwinner sometimes via an employer’s scheme.
Full time parents – many families overlook cover for a full time parent.
You might think there is no need to have insurance for a parent who has given up work to bring up a child. However, in a survey carried out by Legal & General in March 2011, it could cost up to £30,032 per annum** to replace a mum or dad who has given up work or reduced their working hours in order to look after their children.
You may be surprised at the average number of hours per week mums and dads spend on domestic chores:
Hours per week 71 hours 50 hours
Cost per week £578 £410
Cost per year £30,032 £21,306
These figures are calculated using the number of hours spent on household chores and childcare multiplied by Office of National Statistics (ONS) data on average hourly pay rates or equivalent job roles, then multiplied by 52 weeks to give the annual value.
The perception of what mums should be paid for their domestic work is £275 per week. This is less than half of their actual worth in the home, which is £578 per week. The gap between dad’s perceived and actual worth is narrower as he is thought to be worth £273 per week compared to his actual value of £410 per week (L&G Value of a Parent Research 2011).
During the ‘Legal & General Value of a Parent Survey’ it was established that 11% of parents said that if their partner were to die they would give up work to look after the family. Without having personal protection in place, these parents may have to rely on state benefits.
With the costs of raising a child standing at an average of £143 per week** parents without protection cover in place could find that the help they get from the state simply is not enough to cover the costs of looking after a family.
A Family Income Benefit Policy, providing an annual income of £30,032 on death could cost as little as £7.61 a month. If the policy included cover for earlier diagnosis of a critical illness the monthly cost would be £30.36.***
You cannot predict bereavement or a critical illness, however you can prepare for the financial impact it would have on you and your family.
* Source: Tickbox.net - June 2008.
** Source – Legal & General Value of a Parent Survey 2011
*** Illustrations are based on a female aged 27, non-smoker, term 15 years (L&G £7.61 and Scottish Provident £30.36)