Gymnast Simone Biles stole the show at the Paris 2024 Olympics with her captivating and complex routines. However, despite an impressive haul of four medals, the US athlete missed out on the golden sendoff she hoped for in the individual floor event.
While the judges were impressed by Biles’ artistic interpretation and mastery of complex manoeuvres in her finale, failing to execute the basics with finesse – she stepped out of bounds twice – cost her a gold medal.
Olympic gymnastics and financial planning may seem a world apart, but there’s a valuable lesson to learn from Biles’ experience in Paris when it comes to managing your wealth.
While it might be tempting to focus on exciting goals such as buying a new car or building your investment portfolio, without the basics in place you may find it harder to realise these ambitions. This is why protection is a crucial foundation of your financial plan, as it could help you stay on track to achieve your goals if the unexpected happens.
Yet, FTAdviser reports that only 7% of UK adults have accident or sickness cover for slips, trips, and falls – even though more than half (56%) had sustained an injury from an everyday accident.
Read on to discover how an accident could affect your financial plan, both now and in the future, and why protection provides such a valuable safety net.
Everyday accidents are more common than you might realise
You may not think you need protection, especially if you’re relatively young and healthy.
However, as shown above, “everyday accidents” are surprisingly commonplace – and it’s not just high-risk activities that pose a threat to your wellbeing.
While the study reported by FTAdviser did include “falling from height” and “sporting activities” as everyday causes of injury, the research also revealed that getting in your car, going to work, and even walking your dog, could entail potential hazards.
The table below shows the most common type of everyday accidents according to the study, and the percentage of UK adults who have been injured by these hazards.
Source: FTAdviser
The consequences of such accidents could be severe as, of the adults polled, 32% said they have experienced serious injuries from tripping or falling. What’s more, 52% said they would need financial support if they had to take time off work.
An unexpected injury could affect your financial security now and in the future
Many people only realise the importance of financial protection when they’ve been injured and need financial support – in other words, when it may be too late.
One of the most significant financial repercussions of personal injury is the potential loss of income.
If an accident temporarily or permanently prevents you from earning, this could not only make it difficult for you to maintain your lifestyle in the short term, but it might also derail your plans to save and invest for the future.
Potential short-term effects of a loss of income
The longer you’re unable to work, the more likely it is that you’ll need to dip into your savings to cover everyday expenses. If you’re the primary earner in your household or you live alone, you could rapidly deplete the savings you’ve spent years accumulating.
Even if you have an emergency fund, this won’t last indefinitely. Indeed, while inflation is gradually falling, the cost of living has risen in recent years, so your cash savings may not last as long as you’d hope.
Potential long-term effects of a loss of income
As well as placing financial strain on you and your loved ones in the short term, accidents and injury could have a knock-on effect on your later life. You might:
- Miss out on making pension contributions
- Pause regular savings and investments
- Deplete your accrued savings
- Experience changes in your career prospects and earning potential
- Become increasingly reliant on support systems
- Accumulate debt, such as mortgage arrears.
In this way, a period out of work due to injury could make it harder to achieve your long-term goals. For example, you may need to retire later or compromise your standard of living in the future.
Including protection in your financial plan can help safeguard your future
Unfortunately, no one is immune from everyday accidents, and these could have a lasting effect on not only your health but also your finances.
Understanding the potential financial consequences and challenges of everyday accidents and the injuries they may cause, could allow you to take proactive steps to enhance your financial resilience.
Indeed, protection could provide the scaffold that allows you to continue progressing towards your financial goals, even if the unexpected happens.
We can help you assess your unique protection needs and incorporate appropriate cover into your final plan. This could ensure that you and your dependents have the support you need to safeguard your financial wellbeing in both the short and long term.
To find out more, please get in touch. Email hello@sovereign-ifa.co.uk or call us on 01454 416653.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.
Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.
