Working Together in Prosperity

Perhaps the biggest negative when buying insurance is that we often see the potential beneficiaries of any claim as being someone else and not ourselves.  Times have changed though and the need for insurance has changed, of course the main breadwinner of a family, especially a young family, must be insured to allow the family to survive in the event of an untimely end.  But how does that rank in terms of probability. 

In 1900 the average life expectancy was 50, then infectious illnesses were often fatal as were industrial accidents.  Then a miracle happened, anti-biotics were discovered, since then medical advances have been in quantum leaps.  Transplant surgery, keyhole surgery, new drugs and technology. The result, in 1995 life expectancy in the developed world reached 75 - advancing even on the biblical three score years and ten.

Acute illnesses, heart attacks, cancer etc. and accidents are no longer automatically fatal.  Statistically you are four times more likely to suffer from a critical or disabling illness than you are to die before the age of 65 according to the British Heart foundation.  Of course that means little none of us really believes we are going to die before 65, if we are told that we are four times as likely to have a heart attack 4 times zero equals zero! 

To put a somewhat chilling perspective on it however again the British Heart Foundation says that 150,000 men and women in the UK will have a heart attack each year, that's 3 Wembley Stadiums or one full Jumbo Jet every single day!  The more cheerful news is however that 50% will survive, of the 100,000 per year to suffer a stroke 70% will survive and of the 250,000 diagnosed with cancer 40% will survive.

And this is where we came in, because the cost of survival is very high indeed.  In addition to the obvious cost of medical care, for anyone not yet retired, that is forced to give up work or reduce their work load, a drop in income is not going to be matched by a drop in expenditure.  A pension still has to be paid for and probably a mortgage, school fees and not forgetting that a holiday is perhaps even more important.    

The cost is not prohibitive, to cover a mortgage loan for example will cost about the same as say an extra 1/4% interest.  To look at it another way, to cover potential lost earnings for 25 years a 40 year old would pay about the same as he does to insure his house and car.

It is a sobering thought that most of us will now live long enough to get seriously ill.

Ross Pays is the Chairman of The FAA based in Cyprus. FAA offer advice on wills, tax registration services, home, health and car insurance, investment services and tax planning, including Inheritance Tax Planning, together with full accounting services.

Visit Ross Pays website at www.rosspays.com, Telephone 00 357 25 82 58 76, Fax 00 357 25 33 35 93 or e-mail ross@rosspays.com
Initial consultations are free and no obligation and fee quotations will be provided in advance for all services.