Aviva calls for govt and industry to raise protection awareness

clock • 2 min read

Government and financial services must work together to ensure customers get the information they need to put protection at the heart of financial planning, Aviva has urged.

The insurer has published Rethinking Protection, a report outlining proposals to help raise awareness of protection and encourage UK families to plan ahead.

Only four in ten families have life cover while the number of families with critical illness or income protection is around 12% and 8% respectively, Aviva highlighted.

In the report Aviva called for an official process to provide parents with information about financial protection as just one in five families review their insurance needs when a new baby is born.

Mortgage advisers should also be required to discuss protection needs when carrying out a mortgage sale, as part of a duty of care to new homeowners, Aviva said.

Additionally, from April 2016, the current system of bereavement benefits will be reformed. Aviva urged the government to support the reform of bereavement payments with an engagement campaign for families to understand the financial implications of death.

Aviva also said that protection should be a "a required discussion point" when a couple determines the details of their divorce or separation settlement. Currently one in four of families who receive support for their children from a former partner know they have protection in place.

The insurer has also advised that protection should be a key module in personal financial education which is to become part of the national curriculum in secondary schools from September 2014.

Finally, Aviva said that income protection could be offered through the workplace to build on the success of auto-enrolment.

Louise Colley, protection director at Aviva said: "Protection is the bedrock of financial planning and gives families the confidence that they can build their futures without fear of the unknown. We believe every family deserves to understand the financial risks they face and the importance of protection. By working together, the government and the industry can make sure that families have the stability they need."

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