Despite acquiring increased responsibility for the financial security of their households, women are not taking out protection, suggests new research from AXA.
The insurer’s survey of 4,000 women found that just over at third (38%) had life insurance and only one in five (18%) critical illness cover.
The research is particularly significant given the extent to which British households are increasingly reliant on women’s earnings. Research commissioned by the government and published this year suggests that 44% of women now earn at least as the same amount as their husbands and partners, while 19% actually earn more than them. According to AXA’s research, 27% of women with dependent children claim to have sole responsibility for paying the family mortgage. This rises to 36% for women with no financially dependent children. However, over a third (37%) said they “don’t need” cover.
The findings mirror comments made by women contacted by Health Insurance, all of whom bought houses in their 20s and none of whom have bought critical illness insurance or income protection.
“I hope for the best and hope I won’t get ill,” said one 30-year old accountant. “If I got ill or unemployed we should be able to scrape by on paying the mortgage using only my partner’s income and we have some savings which are a back-up. And if I’m honest, I suppose I assume that my Mum and Dad would come through if we were on the verge of losing the house. Maybe if we had kids I might be more cautious.”
“In the event of death, critical illness or unemployment, my flat could be sold since at this stage of my life I have no dependants relying upon me to provide a roof over their head,” said a 27 year-old global financials analyst. “Therefore it seems unnecessary to shell out for a costly insurance policy which I do not need. As for income protection insurance, I was conservative in my mortgage payment assumptions, so that I had a buffer of savings to fall back on in the event of a period of unemployment. So in a sense I had tried to provide a form of insurance myself, at no extra cost. Once I have children, or other dependants, these forms of insurance will become more relevant to me.”
Henrietta Oxlade, an IFA with central London-based Bond Wealth Management, said that it was wrong to assume that life insurance was irrelevant without children.
“You plan for the future, and not for the immediate,” she said. “If you might ever conceivably have dependents in the future, or if you have another person (partner, parent) who depends on you emotionally – I firmly believe that life insurance is an important part of financial planning. Obviously if you take out cover when you are young and healthy the cost is relatively low, but more importantly you never know when the day will come that you are uninsurable. My long term client base is getting older with me, and increasingly and very frustratingly they are regularly getting their premiums heavily rated, or are even turned down for their insurance.”
She added: “I think there should be more marketing specifically directed at women. Most people are not even aware of how cheap life insurance is if you are young, nor that if you get the right sort of product, the cost will never increase, nor that it is much cheaper for women.”