More than a third of women (35%) cite income as their greatest asset (versus 22% of men), yet only 16% have income protection compared to 20% of men. This comes from Sanlam Individual Life’s recent survey of over 900 South Africans, which highlighted the insurance gap between the genders. Women earn up to 35% less than men for work of equal value. This impacts their ability to guard against life’s curveballs. Intermediaries can play a pivotal role to help women build a solid financial foundation against the unexpected.

According to the United Association of SA (UASA), following the pandemic, the projected time to close the gender gap has gone from 99.5 to 135.6 years. In a country where 38% of households are headed by women, this has major ramifications. The pay gap contributes to women struggling, more than men, to protect themselves against the unexpected through adequate risk cover and savings.

Here are some findings from the Sanlam survey:

• Should a woman lose her income, she is less likely to be able to cover her bond or rent – even for a month. Only 26% of women had sufficient risk cover in place to continue paying their bond/rent long-term, and 29% would not be able to pay it at all. The picture is quite different for men, however, with 39% having sufficient cover to pay their bond/rent long-term, and only 14% completely unable to cover it. Men remain better positioned to pay these costs than women. In a country of women-headed households, this is concerning.
• Most women (44%) without income protection perceive the product as too expensive, which may point to the earning gap between the genders.

The types of cover women should consider

When considering what types of risk cover women need, death cover is very important for women who are sole breadwinners, such as single mothers. It’s also pivotal in dual-income households where the family relies on both incomes. In addition, disability and income-protection cover provide critical financial protection to anyone rendered unable to work due to illness or injury, including single women with no dependents. Finally, severe illness cover is an important consideration for protection against the financial implications of a major illness.

Below are Sanlam Individual Life’s 2021 claims statistics for additional insights into cover that is especially pertinent to women. These findings could be useful for intermediaries to share with their female clients.

• 66% of severe illness claims from women were for cancer. It’s therefore important that women select risk policies with comprehensive cover for cancer, including cover for early cancer and mastectomies.
• C-section and pregnancy complications are common reasons for claims under Sanlam’s Sickness benefits. Women who intend to have children should check whether their income protection covers these incidents.

How can intermediaries help women plan for ‘what ifs’ when money is tight?

The right choices aren’t always the easy ones. We need to help our clients to choose them anyway. It’s important to present information in a relatable way. Ask female clients to envision a scenario where they’re unable to earn – temporarily or permanently. Who will pay the bills to cover the family’s monthly expenses? The next step is to go through their monthly budget to see if there are any non-essential outflows to redirect to life cover.

Our intermediary partners can play a vital role in helping women prioritise the essential cover they need while choosing the best value-for-money options, like Sanlam’s Classic range. Financial advisers are also optimally positioned to help women choose options that consider current as well as future affordability – like premiums that don’t increase too steeply over time.

We know that tough money conversations today can prevent even tougher times in the future. By supporting women clients and being cognisant of the implications of the gender pay gap on affordability, advisers can provide women with a realistic financial roadmap to address their risk cover needs.

An emphasis on empathy

The recent Sanlam research showed that women are likely to prefer a financial adviser of the same gender, believing a woman will better understand their needs. At the heart of this is the desire for empathy and understanding. Intermediaries should be cognisant of this need for connection in all their conversations.

Sandra Scharf, competitor intelligence analyst at Sanlam Individual Life, suggests approaching tough risk conversations with clients from a place of knowledge. She says annual claim statistics show the difference in women’s experience of severe events versus that of men. For instance, in Sanlam Individual Life’s 2021 claim statistics, breast cancer accounted for 65% of all cancer-related severe illness claims for women. “This highlights the need for additional cancer cover for women.”

Importantly, 19% of disability claims for women were for cancer as well, along with 15% of income protector claims. This shows the need for comprehensive cover as conditions like cancer not only affect clients’ health but can also negatively impact their ability to earn an income, says Scharf.

Her advice is to acknowledge the difference in realities experienced by women and to help them feel prepared, in control, and financially confident in every life stage. “For example, speak to younger clients about the critical importance of income protection as the long-term loss of income due to illness or injury is the single biggest financial risk young people face. Present plenty of relatable examples and be as reassuring as possible. Most importantly, listen. Empathy builds trust and sets the foundation for a long-standing relationship.”

 

Article credit Gender pay gap contributes to underinsurance in women | MoneyMarketing (b2bcentral.co.za)