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Most families lacking financial protection

Just seven per cent of families in the UK feel they have adequate financial protection, a new report finds.

According to research by Aviva, 61 per cent of families do not have basic life insurance, 87 per cent of people have no critical illness cover and 89 per cent do not have income protection. The report indicates that single parent families are least likely to have protection insurance with 76 per cent of single parent families and 68 per cent of divorced parents with two or more children, admitting to feeling under protected or not protected at all.

When questioned why they have no protection insurance, 19 per cent said they thought it was too expensive and five per cent believe it never pays out and is not worth buying. Interestingly the report also found families prioritise paying off unsecured debts, over setting up a savings account of getting financial protection. When asked what would be prioritised if they received a £10k windfall, 44 per cent said they would pay off unsecured debts with just 5 per cent saying the money would encourage them to take out protection.

Aviva's head of protection marketing Louise Colley told Money Marketing that consumers should speak to those working in jobs in insurance companies for advice on protection: "Life insurance and income protection can provide families with financial peace of mind in the unfortunate event of a sudden loss of income."

"Critical illness insurance can provide a lump sum cash payment should the insured suffer serious illness or disease. By making sure they have financial protection in place, families can have invaluable peace of mind for a more financially secure future."

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