That's according to a survey carried out by Aviva, showing that the “It won't happen to me” approach seems to be one of the most common financial plans in the country.
60% of Irish people know someone who has been sidelined by illness for more than four weeks while 29% of people know someone who has gone through this in the past year alone. But despite that a disproportionate number of people have no plan in place should it happen to them.
This is all according to a survey carried out by Aviva, which points to a public that is underprepared for the average household expenditure of €1,132, should they fall ill.
Most important expenses
When asked,“Which, if any, of these outgoings are critical and would need to be paid regardless of circumstance – i.e. the bills where you might need to call on friends and family to help you with until you were back working?”, the public rank utility bills most important at 67%, with living expenses ranking behind at 61%, with mortgage repayments at 45%.
Karen Gallagher of Aviva said: “The feedback from this survey is quite enlightening, as well as worrying, when it comes to understanding public perception of what people would fall back on financially if they were unable to work for an extended period. The research also shed some light on what people consider their biggest expenditures, and what they might struggle to pay for.”
When asked about the CSO average weekly expenditure of approximately €1,132 Ms Gallagher said:
“That’s a significant sum of money to have to replace to meet bills and other payments if you are not in receipt of a wage.”
When asked: “Do you have any plan in mind that you could fall back on, if you were unfortunate enough to find yourself on sick leave beyond what your employer would cover?', the most common response was; no plan, with 40% of respondents crossing their fingers and hoping for the best.
39% of people would rely on their savings, with only 15% relying on income protection.
“4 out of 10 people plan to use their savings as a fall back to cover bills and living expenses if they were unable to work for a period. Savings of even €30,000 won’t go very far in the event of illness or injury, and realistically, the average household probably has much less than this figure. To put it in context, the average income protection claim paid out lasted 6.5 years.'
“€30,000 savings would only last less than 2 years, based on spending €3,000 a month on your mortgage repayments, car loans, food bills and other expenses, assuming it was supplemented with a social welfare sick benefit payment."
“What’s most concerning is people’s lack of real understanding or awareness of the position they would be in if they were to get sick, with only 15% of respondents having an income protection policy in place and a further 7% with a savings/investment policy.”
Have you got a backup financial plan in case you got sick? If not, you could consider taking out serious illness cover, which will pay out a tax-free lump sum if you're diagnosed with one of the illnessess covered under the policy. Check out our serious illness cover comparison tool where you can compare quotes online in just seconds.
Or maybe you need to get saving instead? Then check out who has the best rate for your savings needs in just seconds with our savings comparison service.