In case of emergency
A lack of protection against serious illness is most prevalent among the self-employed.
Paul Pickford was fit and healthy and ran a car dealership until two-and-a-half years ago. In November 2012 at the age of 42 he suffered a brain stem stroke while at work. He is now paralysed and cared for by his wife Vicky.
“I was taken to hospital where, for a variety of care-related reasons, I spent 14 months as an in-patient. I was discharged in January 2014, paralysed from the neck down, nil by mouth and unable to speak,” Paul explained via his computer, which speaks whatever he types.
While he was fit and healthy, Paul and Vicky didn’t think about lost income or the extra costs that inevitably result from such a devastating event, so they didn’t put any critical illness cover in place. When Paul fell ill and could no longer work, there was no policy to fall back on, and no income to help them cope.
“I wish we had put other things in place,” says Vicky. “We honestly didn’t think anything like this could happen.” And it’s not just Paul who has suffered from a loss of income. “My life’s on hold as much as his,” she adds.
Unfortunately, there is a growing number of people who don’t have cover in place. This protection gap is particularly prevalent among those who run their own business. The economic upheaval over the last six or seven years has seen the number of self-employed individuals increase dramatically. Yet many who left behind employee protection insurance policies haven’t replaced them with personal policies. This growing need for personal cover has been exacerbated by the reduction in sickness benefits from the state.
But there has been some positive news for Paul. As part of a charity-led campaign called Seven Families, he receives support and advice to help improve his quality of life and aid rehabilitation in his home.
The campaign, which is funded by a number of leading protection companies, provides a tax-free income for one year to seven people who have lost their income because of a serious or long-term illness or disability. The campaign aims to raise awareness of the financial damage that long-term illness or disability can do and highlights how the right cover can make a huge difference to families hit by an accident or a medical issue.
“The money Vicky and I receive, and the access the campaign gives me to experts, are godsends. I have not been affected cognitively, so the plan is to start some sort of business, although it would have to be something that can be controlled mainly via computer,” says Paul.
Expect the unexpected
Tony Müdd, divisional director at St. James’s Place, says Paul’s story is a powerful one that demonstrates the value of protection to anyone who thinks “It won’t happen to me.”
“People never expect this sort of thing to happen, but statistics show you’re four times more likely to be off work with a serious illness than die before you retire,” he explains.
“Small business owners without the correct cover should ask themselves what would happen if they suffered an illness or disability and found they could no longer run their business.”
Understanding the need for protection, whether this is income protection, critical illness cover, or something else, and examining your options with the help of a financial adviser is, says Müdd, the first step to preparing for the sort of events that can happen, but we hope never will.