Although many households rely on women to keep them afloat, there is a tendency to underinsure. Mark Jones calls for more focus.
It is usually assumed that the man is the main breadwinner in a household, but the latest consumer research indicates that things are changing.
The figures show that there has been a rise in the number of households where the woman out earns their partner. In fact, LV= research shows that four in every ten women are now the breadwinner in their house.
Over the past three decades, the number of female breadwinners has jumped from just 26% to 41%, with today’s female breadwinners earning on average £51,965 (£14,000 a year more than their partner). This means that millions of women are now bringing in up to 37% more per year than their other halves.
Of these households, 40% admit that they are now so reliant on the female breadwinner’s income that the man of the house would not be able to provide sufficient financial support to meet all the regular financial commitments, if she were unable to work.
No safety net
Despite this, the majority of female breadwinners have no safety net in place should anything go wrong. More than half (53%) don’t have any life cover, 80% do not have critical illness cover and 89% don’t have an income protection policy in place.
While the percentage of women without protection is higher than the national average, the figures mirror the national trend, in as much as women are far more likely to have life insurance than income protection or critical illness cover.
It is worrying that so few have any financial safeguards in place, because it means they are likely to find themselves in a precarious position if the worst was to happen. However, when I speak to advisers they often say that their clients’ priorities are to manage and grow their wealth, rather than protect it.
Figures indicate that there are more female breadwinners aged between 35 and 49 than in any other age group and that an estimated 2.5 million female breadwinners are also mothers.
This suggests that there is a real need for many in this group to consider life insurance to ensure that their children are not left financially vulnerable if the worst should happen.
Studies show that it is often the woman of the house who has the final say on financial decisions such as day to day bills and savings. However, the rise in the number of women whose income makes up the bulk of their household’s income means that it is important that they realise not only the importance of protecting their lifestyle and the value that protection policies can offer.
That said, it is easy for existing and potential clients to adopt the ostrich position when it comes to the subject of protection, choosing instead to subscribe to the belief that they will never fall ill and be unable to work.
While milestones such as starting a family and property are points at which clients may consider protection, typically it is the experience of a close friend or loved one that prompts them to take action. As a result, protection tends to be bought by those in their late thirties and over.
The time to buy
However, the best time for anyone, male or female, to take out protection products such as life insurance and critical illness cover are when they have youth on their side, because they are less likely to have suffered from any major medical event, which makes cover cheaper.
Majority owned by The Property Franchise Group
Macmillan Cancer Support partnership
Previously at Zurich