Aviva Family Finances Report reveals major concerns over lack of protection insurance

Article date: 19 January 2011

  • Just 7% of UK families feel completely financially protected
  • 61% do not have life insurance
  • Aviva: 99% of life insurance claims are paid out.

Aviva’s first Family Finances Report reveals that 93% of families do not feel they have adequate financial protection. On average a staggering 61% of families confessed they don’t have even basic life insurance, with 87% saying they are without critical illness cover, and 89% without income protection.

The family unit most likely not to have protection insurance* are single parent families. Unsurprisingly, they are also the most likely family unit to feel financially vulnerable as a result of being under/unprotected. 76% of single parent families and 68% of divorced parents with two or more children told Aviva they felt financially under/unprotected.

Critically affected by illness
These findings were revealed in a new quarterly report from Aviva, which examines the finances and concerns of the 84% of the UK population who live as part of a modern family.** The first issue of the Aviva Family Finances Report finds a disturbing 42% of families admit they have been seriously affected by illness and yet still do not have any protection insurance in place. 

The seriousness of this situation is highlighted by the fact that of those families who’ve been affected by illness, 25% of families testify they’ve already experienced what it is like when one of the main breadwinners is unable to work due to illness. A further 15% have seen a family member unable to work due to stress/depression/mental health issues, and 7% say they’ve witnessed a family member give up work to look after another family member.

With the report also finding UK families rely on salaries for 75% of their income, it serves to highlight how vulnerable many families are to external financial shocks such as redundancy, illness or in the worst case, death; especially as 33% of families say they have no savings and 40% of families say they save nothing each month. 

Income protected
As to why families do not have protection insurance, 19% say they have not bought life insurance because they thought it was too expensive and they cannot afford it, while 5% believe it never pays out and therefore isn’t worth buying. In actual fact, Aviva’s own data shows life insurance costs from as little as £5 a month and 99% of its life insurance claims are paid out. The average sum paid out on a life insurance claim by Aviva is nearly £51,000***. 

Aviva has just launched a high profile TV advertising campaign to encourage families to think about taking out life insurance, to tackle this issue of under-protection in the UK.

Debts put first
The report also found families will prioritise paying off unsecured debts and setting up savings accounts ahead of financially protecting their loved ones and homes. When asked which priorities they would address if they received a £10,000 windfall, respondents told Aviva they would first pay off unsecured debts (44%) then start/put money into an emergency savings account (30%) and finally start/put money into a long-term savings account (30%). Only, 5% said the money would incentivise them to take out life insurance, critical illness cover or income protection. 

Louise Colley, head of protection marketing at Aviva comments: “At Aviva we recognise that different family groups all face different economic pressures, but one thing that links all families is a desire to protect loved ones from unforeseen shocks. The bedrock of any financial planning should look at what measures are in place in case the worst were to happen. If this is ignored then any financial plans are set in sand with no firm foundation.

“Life insurance and income protection can provide families with financial peace of mind in the unfortunate event of a sudden loss of income, and 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.” 

To see a full copy of the Aviva Family Finances Report see: www.headlinemoney.co.uk.


Download a full copy of Aviva's Family Finances Report (756KB) 

If you are a journalist and would like further information on a specific family group, please contact:        

Aviva Press Office
Sarah Poulter: 01904 452828 / 07800 691569: sarah.poulter@aviva.co.uk

The Wriglesworth Consultancy
Lee Blackwell / Emma Beresford: 020 7427 1400 / l.blackwell@wriglesworth.com

* Protection insurance is defined here as an umbrella term including the following insurance products: life insurance, private medical insurance, income protection, and critical illness cover.

** Based on customer profiles and Government data Aviva has recognised the seven most common types of modern family as:

  1. Living in a committed relationship with no plans to have children
  2. Living in a committed relationship with plans to have children
  3. Living in a committed relationship with one child
  4. Living in a committed relationship with two or more children
  5. Divorced/separated/widowed with one child
  6. Divorced/separated/widowed with two or more children
  7. Single parent raising one or more children alone.

*** Aviva data: average life insurance payout £50,932 - full year figures 2009.


Management information was provided by Aviva and the remaining data was sourced from the Aviva Family Index which used findings from over 2,000 people who are members of one of the seven groups of families identified above. This report is a definitive look at the personal finances of families in the UK. Not only does it look at personal wealth, income sources and expenditure patterns but also tracks how these change across the different types of family unit. 

In addition to the regular data, each quarter a spotlight will be shone onto a different relevant topic with protection being the choice for January 2011. A press release highlighting the other key points from Aviva’s Family Finances Report can be found at: Aviva finds UK family finances under pressure with 39% feeling too stretched to take on extra financial obligations.

Notes to editors:

Aviva is one of the world's largest insurance groups** with 53 million customers worldwide and 46,000 employees.

Aviva’s main activities are long-term savings, fund management and general insurance, with worldwide total sales of £45.1 billion and funds under management of £379 billion*.

In the UK, Aviva takes care of its 19.2 million customers by helping them look after their future, protecting what’s important – from their health to their homes, their cars to their business – and saving for the future.

Aviva has a 10.5%*** share of the UK life and pensions market and insures one in six homes and one in 10 cars in the UK. It is also one of the oldest UK insurers, with a heritage stretching back more than 300 years.

RAC, which is owned by Aviva, provides breakdown and insurance services for individuals and businesses and has around seven million customers.

Aviva is carbon neutral worldwide, and is ranked in the top 10% of socially responsible companies globally by the Dow Jones Sustainability World Index. In the UK, Aviva invested £3.8 million into local communities in 2009. Read our corporate responsibility report at www.aviva.com/cr.

Aviva’s global Street to School programme is working in partnership with Railway Children in the UK to get children living on the streets back into education and everyday life. Find out more at www.aviva.co.uk/street-to-school.

The Aviva media centre at www.aviva.com/media includes images, company and product information and a news release archive.

For broadcast-standard video, please visit www.aviva.com/media/video.

Follow us on twitter: www.twitter.com/avivaplc 

** based on gross worldwide premiums at 31 December 2009
*** Source: ABI data released August 2010

Back to top