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Life Insurance Gender Gap: Women Still Underinsured

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Life Insurance Gender Gap: Women Still Underinsured

Whether you’re a professional woman and the primary breadwinner in your household, working part-time during school hours, or the stay-at-home mother keeping the household ticking over, you’re a valuable member of your family.

Given your important contribution to the household, it is remarkable that Australian women remain vastly more underinsured in life insurance than men.

Women still underinsured

A Westpac Women Insurance Survey revealed that six out of 10 women do not have life insurance, with many failing to plan life insurance cover before beginning a family1.

While Australians are underinsured in general2, Australian women are half as likely as men to search for insurance, with 70% of life insurance enquiries made by men in 20133.

Policies connected to superannuation might offer the minimal amount of protection that just doesn’t reflect your value in the household.

Maybe you believe that the life insurance policy connected to your superannuation is enough, or that your value in the household is minimal. Neither of these cases is necessarily true.

To begin with, life insurance in your superannuation may not be tailored to you and your family’s needs. Policies connected to superannuation might offer the minimal amount of protection that just doesn’t reflect your value in the household. But life insurance should not be a generic, one-size-fits all policy.

What many women also don’t realise is how important their contribution is to the family. Whether you are a full-time worker, a part-time worker or a stay-at-home mother, the value you provide to your household is precious. But did you know you can put a value on this input, and protect your contribution to your family in times of need?

Close-up of thoughtful young couple sitting on the couch while man in formalwear pointing clipboard with document

Life insurance for stay-at-home mothers and part-time workers

Think of life insurance as a safety net for your family. There are various types of life insurance aimed at protecting either your income or your family in case of an emergency. You may be diagnosed with a serious illness, receive a sudden, debilitating injury, or even die. Different life insurance policies can cover these scenarios, so that, should your family lose your income, their lifestyle is protected regardless.

According to research from the Australian Bureau of Statistics, life insurance becomes a priority when kids step into the family portrait4.

Figures show that female workforce participation drops from 46% to 39% when the kids come along, but goes back up again during the pre-school years5.

During this period, family income will significantly drop. It’s also generally the time when people start to think about life insurance policies, but a common belief is that only the family breadwinner needs to be covered.

Figures show that female workforce participation drops from 46% to 39% when the kids come along, but goes back up again during the pre-school years.

And with 94% of fathers with children aged 0-5 working or looking for work (compared to 57.5% for women), it’s usually men who seek a policy6.

The value of mothering

It can be easy to underestimate your value just because you’re not on someone’s payroll. But the effort you put into keeping the household running is treasured – and you can put a value on it.

In fact, in America, there is an annual survey that does just this. Salary.com tries to estimate a mother’s worth if she was actually paid for the at-home work she does every year. In 2012, the average stay-at-home mother was worth about $113,0006.

Think about the work you may do as a part-time or stay-at-home mother. There’s the cooking, endless cleaning, chauffeuring the kids around, looking after the bub day and night, helping the kids with their homework when they’re in school.

Female Home Tutor Helping Boy With Studies

Daily Life’s Jessie Cole has something to say about the value of mothers:

“What is forgotten in debates about parenting payment is that mothering is work. It may not be financially remunerated, or a sure-fire path to the top, but it is work nonetheless. And if mothers didn’t do it, someone else would have to be paid to. Although childcare workers are among the lowest paid in our ranks, we still don’t expect them to work for nothing.”7

So who will take over your work if you were suddenly unable to pitch in? If you became injured or ill – hell (or heavens!), even if you die – someone has to pick up the slack. It might be your partner, who may have to take time off work in the process, or professionals (a nanny, a cleaner, a day care spot). Either way, your family will likely bear the costs of your absence.

Life insurance policies are there to protect your family’s lifestyle and livelihood. Replacing the hard work done around the house, not to mention the emotional support a mother provides, is no easy feat.

Insurance providers generally take this into account when drafting up a policy, and many are happy to put a dollar value on the unpaid work you do. And if they don’t underestimate the value you have at home, why would you?

How much cover do I need?

Everyone’s lifestyle and family needs are different . To help you work out how much cover you need, contact a life insurance provider and talk through your options.

Remember that life insurance encompasses a range of different coverage options, including Life cover, Total and Permanent Disability cover and Trauma cover. These life insurance options protect your family should you fall too ill or injured to perform your usual work duties – whether they are bringing in the income or taking care of the home.

45-year-old women are 94% more likely than men to make a disability insurance claim due to sickness.

Some of the things that you might want to consider when applying for a life insurance policy include:

  • existing debts including the mortgage, credit cards or personal loans
  • your average household budget, including ongoing expenses for your children’s comfort (and your own)
  • the cost of childcare
  • replacing the income of a family member who stops work temporarily to take care of your children
  • how much the loss of your income will affect your family on a weekly basis
  • savings for your dependents.

As a woman, it can be worth looking into your options, especially when research shows that, for example, 45-year-old women are 94% more likely than men to make a disability insurance claim due to sickness8.

Do I really need life insurance?

We can’t answer this question; the choice is entirely your own. It requires thinking about your needs – as well as those of your family – and weighing up the cost-benefits.

If you’d like to explore your options, contact our life insurance team today at Budget Direct today.

 

Sources
1.http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Chapter8002008
2.http://www.news.com.au/finance/money/protect-your-family-for-life/story-e6frfmd9-1226519311132
3.http://riskinfo.com.au/news/2015/06/26/australias-underinsurance-gap-explained/
4.https://knowrisk.com.au/insight/articles/more-men-looking-for-life-insurance
5.http://www.abs.gov.au/ausstats/abs@.nsf/products/BBFFAEB8C564175BCA257CD20025F9D9?OpenDocument
6.http://www.salary.com/what-s-a-mom-worth-in-2012/
7.http://www.dailylife.com.au/news-and-views/dl-opinion/how-much-is-a-mother-worth-20130107-2cc96.html
8.http://www.fsc.org.au/downloads/file/MediaReleaseFile/2015_0604_AustraliareleasesnewstandardtableforretaildisabilityincomebusinessFINAL_4June2015.pdf