The reality of average risk

February 08, 2020
Taryn Lee-Johnston

Averages can be both interesting and informative, but they can also be misleading.  Firstly, there are three different ways of calculating them (mean, median and mode), which can produce significantly different results.  Secondly, even if “average figures” suggest that there is little likelihood of a negative event happening to you, it can still make a lot of sense to prepare for it in any case, especially if it could have major consequences for your health, wealth and/or happiness.  Here are a few examples of how this could work in practice.


Death comes for us all eventually, the only question is when.  Although the odds go up as we get older, the fact is that younger people can and sadly do die of various causes and, depending on their situation, it may be a wise precaution to think about this and prepare for it.

People with children absolutely must think about what will happen to their children in the event of their death, even if they are married or in a civil partnership and this may entail more than “just” getting life insurance (although this may well be a good place to start).  For example, you may want to look at getting some or all of that life insurance paid into a trust fund for your children so you continue to have some degree of control over how it is spent even “from beyond the grave”.

For the sake of completeness, when calculating the financial impact of a person’s death, remember to account for the fact that other people may need to be paid to undertake work they do for free, such as childcare.

You might also want to look at making a will which specifies your wishes for your children’s care if one or both of you dies.  This can save them a period in social care and could potentially avoid “tug-of-love” court battles between different family members.  It could also give you the opportunity to discuss the matter with the people in question and potentially with your children, depending on their age.

Ill health/injury

While NHS resources may be sufficient for your actual treatment, that treatment may not be made available as quickly as you would like and it may not cover options which are considered preferable rather than essential.  These are two arguments in favour of supplementing NHS care with private medical and/or dental insurance.

You might also discover that being ill or injured for an extended period has additional financial consequences which might not be (adequately) covered by state benefits.  For example, it may limit your opportunities at or for work or your ability to look after your children, pets and/or house.  These issues may be covered by other forms of insurance such as critical illness cover or income protection cover.

Unemployment/Being unable to work

While being unemployed and being unable to work are, technically, different, they can both have the effect of disrupting your finances.  Ideally, your first line of defence against either of these issues will be a solid emergency fund, but savings can only last for so long and state benefits might not be sufficient for you to maintain a decent, basic, standard of living in your situation.  You might also prefer to avoid the hassle of having to go through the claims process for state benefits, especially means-tested benefits, and prefer to deal with a private insurance company.  Again, this is a situation where products such as critical illness cover & income protection cover could come in helpful.

The FCA does not regulate wills

For wills & payment protection insurance we act as introducers only