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A frightening number of us are just a pay cheque or two away from financial disaster. In a poll of 600 people carried out by PMI Health Group, 77% could not afford to meet their living costs if their income stopped tomorrow. In the same survey, 46% said their employer would not continue to pay them their full salary if they were off sick or injured for 3 months or more. How prepared would you be if, through unexpected accident or illness, you were prevented from working for the foreseeable future? Do you have a back-up plan?

There is a direct link between physical/mental and financial health. If your health is severely compromised in any way it is extremely likely that your financial health will also suffer. This is not only because your wage-earning capacity may be affected but also because ill-health leads to increased costs in everyday expenses. For example, you may need health aids to assist you in your daily life or additional transport costs if your mobility is affected. Research has found that many people have an unrealistic idea of the level of state support available to those who suddenly find themselves unable to work.

The answer, of course, is Income Protection insurance (IP). Many insurance experts believe that IP is particularly important as, if there is no income coming in, you can’t pay for anything including any other insurance policies you may have. The Income Protection Task Force (IPTF), in it’s role as a promoter of income protection awareness, is on a quest to highlight the real dangers of leaving yourself financially vulnerable.

The IPTF, led by it’s chairman Peter le Beau, is turning the spotlight on this issue and in September this year launched the ‘Seven Families’ initiative. This is an ambitious social showcase of the financial and emotional challenges faced by families whose lives have been derailed by crisis.

In partnership with Disability Rights UK, the IPTF has chosen seven families (hence the name) in which the main breadwinner has been prevented from working due to severe accident or illness. None of the seven families had any income protection policy in place. Seventeen insurance companies are committed to funding the project for a year. The funds donated by these companies will provide a tax-free income to the families for one year, along with rehabilitation and counselling support. In other words, they will receive the equivalent payout of an income protection policy.

The initiative is not only raising awareness of the financial safety net that having an income protection policy gives you, it also shows the additional support that many people don’t realise can also be part of an IP plan: rehabilitation and counselling. Such support can enable you to return to work or find alternative employment if you are unable to resume your original career.

The shocking reality is that the long-term disabled are more likely to have debts and less likely to have savings. The charity Scope carried out research earlier this year into this area and found that disabled people pay, on average, a staggering £550 a month extra on everyday living expenses. Quite apart from needing to pay out for specialist equipment, these additional costs can also include having to spend more on essentials such as heating, clothes, taxis (if mobility is compromised), even such things as an adapted knife and fork to simply be able to feed yourself.

The experiences of the seven families will be documented throughout their year and shown on various media outlets and a dedicated You Tube channel. The hope is that the insurance industry can play it’s part in educating the public about the importance of income protection and why it’s vital to have your own plan B.

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