Recently, I saw the program “Steenrijk Straatarm” (Filthy Rich Penniless). In each episode, a wealthy couple trades a week of life with a poor family. I especially find the participants' stories interesting. How did they end up in the life they are now living?

This episode was about a "penniless" mum with 4 kids. They have to get by on a few tens every week. How did this come about? The mother was in a relationship with the father of her youngest child. They both had full-time jobs and led everyday family life. Not very wealthy, but enough to live on. Until ...

The man called his wife from the car because he was not feeling well. He thought of a heart attack and turned out to be right. While talking on the phone, the man passed away in an accident—a dramatic story.

The story got even more dramatic when it turned out that nothing had been arranged just in case one of the parents would die. They had a mortgage and believed that the risk of death was co-insured. It wasn't. In the meantime, the mother started working fewer hours to care for the children.

You may understand the sequel: large debt, forced home sales, and debt restructuring. Is this a unique story? Unfortunately, it is not.

I researched this issue with my colleague Fred de Jong. Our research shows that between 35 and 40% of households may get into financial problems if one of the partners dies or becomes incapacitated for work. These families have no or inadequate insurance, insufficient financial buffers, and fall sharply in their monthly income. Every year, we are talking about 51,000 households in the Netherlands. I think that is a large number.

And frankly, it is shocking.

We live in a wealthy country with a social contract to support each other when needed. In reality, we have not organized this well enough. Even people who assume they are financially prepared for death or illness are financially vulnerable with all the social consequences that go with it.

Financial advisors and insurers have a social responsibility. We may expect them to help customers stay financially afloat when faced with the unfortunate. There is room for improvement in this expectation.

But we shouldn't just look at the financial industry. Many households are out of sight of insurers and advisers. We expect governments and other institutions to take social responsibility for these families by providing adequate public information to people about the risks and providing a financial safety net. There is still much room for improvement there.

The story of the mother with the 4 children can happen to all of us. Let's work together to ensure that the suffering does not get worse than it already is.

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