Is there inequality between the sexes in the protection market? Diane Saunders investigates
On the face of it we all have the same protection needs. We need to ensure there is enough life assurance to pay debts and sufficient capital to provide for any financial dependents when we die; and we need to have income protection (IP) in case we become too ill to work. No differences there then. However, the solutions we offer in the protection market may not be ideal for both men and women.
Different rates
The industry has been talking about the women's market for almost all of the 27 years I have been working in financial services. Providers see the target market as a tantalising carrot and have spent many hours and a lot of money designing marketing literature to attract women. However, it is not the product brochure designers who need to re-think, it is the actuaries who design products and set underwriting parameters.
Most underwriters are male and do not understand women's problems. A good example is a conversation I had with an underwriter some years ago when I was challenging small print in a policy. He told me, with a perfectly straight voice, that a pregnancy is a 'self-inflicted' condition. Did he have children I asked? Yes, he replied. Did his wife conceive when he was out of the room? I enquired.
That particular underwriter may not have understood conception, but as anyone who arranges life assurance, critical illness (CI) and IP will know, actuaries charge different rates for men and women, smokers and non-smokers and they also take into account your age and your occupation. When challenged most actuaries will tell you they base their tables on statistical evidence, but they keep those stats to themselves. And the data the statistics are based on are not as certain as they once were.
For those women who work after school or university with an uninterrupted working life, there is no difference between the sexes. Many women, more than in any previous generation, have the choice about fertility. Many women who have children take only short maternity leave and continue their careers, worried that they may be severely disadvantaged by a longer career break.
More importantly, many women make the choice not to have children at all and often live by themselves. The data does not take any account of their lifestyle and they will be subject to the same actuarial statistics as the woman who chooses to have 10 children over 20 years.
Women have a different attitude to their health. They are more likely to look after their diet and exercise as part of their everyday lives. Running a house and a family is physically demanding, and we tend to take precautionary measures to maintain good health. More women than men use alternative medicine and we discuss our problems which, we now discover, is so good for our general wellbeing.
Body difference is the crux of the matter. More women than men contract breast cancer and only women can contract cervical and ovarian cancer, but only men can contract prostate cancer.
Patriarchal
However, women are more likely to be financially dependent and need to make sure they are properly maintained if the main earner dies. She is usually the parent who is responsible for the children after a divorce, but is rarely advised to insure the maintenance payments if the man dies or becomes too ill to work. Why are these insurance policies not set up as a matter of fact and made necessary by a court order? Why don't family lawyers insist that their client's future income is indexed and protected?
Many women feel our industry and advisers look down on them. They often feel ignored if they are in a joint meeting with their male partner. They do not feel able to ask simple questions and if they do not understand the products on offer how can they sensibly make a decision? It does not help if the adviser litters the meeting with jargon and makes assumptions about the client's understanding.
When I took my FPC exams the explanation for selling family income benefit (FIB) was simply explained. Women could not cope with large sums of money and would be better with an ongoing income. Patronising? Yes. Patriarchal? Definitely. And this ignores the fact that if someone is unfortunate enough to benefit from an FIB plan it is usually changed to a lump sum, which will be smaller than if a level or increasing plan had been taken out in the first place. Could such a plan be designed today?
So maybe the question should be: "Why can't a woman be more like a man?" and we can all pretend the differences don't exist. But many people I know would rather ask: "Why can't a man be more like a woman?"
Diane Saunders is principal at Diane Saunders IFA
COVER notes
&149; Modern underwriting practices do not take the fact that many women choose not to have children or take long career breaks into account.
&149; Women tend to take better care of their health than men do, yet underwriters do not take this into account.
&149; Many women still feel insurers and advisers look down on them and feel uncomfortable asking questions about products.
