Irish people have an unrealistic view of coping with a serious illness, according to a survey by insurance firm Royal Liver.

The company, one of the leading players in the provision of serious illness cover in the State, says 81 per cent of survey respondents recognised the need for serious illness cover to protect their income.

However, just 36 per cent claim to have taken out such cover and figures from the Irish Insurance Federation show that the numbers actually taking out such policies in the five years to the end of 2003 amount to just 1.8 per cent of the population.

The TNS/mrbi survey found that the major concern of people in the event of serious illness was covering the cost of basic living expenses (28 per cent) and actual medical costs (21 per cent).

However, only 2 per cent rate childcare a concern with 7 per cent worried about education. "This is surprising" despite the fact that "89 per cent of those surveyed expected their children to study at third level yet only 7 per cent felt paying for this would be of concern should they find themselves unable to work," said Mr John Walsh, Royal Liver's national sales and marketing manager.

"As life expectancy increases, it becomes more likely that people will face a serious illness at some point in their life," said Mr Walsh. He points to studies showing that people face a one-in-three chance of developing cancer before the age of 74.