Women leave life cover off critical list
Female breadwinners are failing to protect themselves and their families by not taking out insurance. Alison Shepherd investigates
Sunday 16 May 2010
Women across the country are risking their families' future security by failing to take out insurance to protect their dependants if they were to become ill and be unable to work.
More and more women are finding themselves as their household's main wage earner as the recession claims thousands of jobs, the number of single parent families continue to rise and the gender pay gap gradually closes. And yet, according to a study by Axa Life, only 36 per cent of women have any life insurance, and just 18 per cent have critical illness cover. The minority that do protect themselves also considerably underestimate their worth, with the average cover being just £90,000 for life insurance and £80,000 for critical illness, enough to cover only two years of the average working woman's life.
It is not only women who work outside the home whose long-term illness could leave their families financially vulnerable: the cost of childcare and housework if a stay-at-home mum were to fall ill would cost an average of £23,000 a year to buy in, according to Axa. But only 13 per cent have any critical illness cover.
"The research shows women are becoming increasingly important to the family economy yet leaving themselves and their dependants desperately vulnerable. And the future is likely to see the situation getting worse," says Jamie McIver at Axa.
This vulnerability is highlighted by figures, gleaned from a mix of Axa's new business and a projection of future claims, which show that that one in 10 women who take out a combined life and critical illness policy will either die or suffer from a condition enabling them to claim before the end of their policy; and one in 257 who take out life cover only will die before the end of their policy; while statistics from The Lancet journal show that nearly 6 per cent of deaths among women will occur during key working years.
But why do so few women protect themselves? Again the Axa research suggests that nearly a quarter have just not thought about it, and more than a third think they don't need it. Others assume that their partner's insurance was enough, or that it was just too expensive.
"It is also true to say that, historically, women were less likely to have such an important role in the family finances and so were less likely to need or think about cover. Unfortunately, while women may have caught up in other areas, financial planning has somehow got left behind," says an Mr McIver.
Caroline Anstee, director of Towergate Financial for Women, has her own theory. "I suspect many women have had bad experiences from financial advisers in the past. Many will have bad memories of divorce and feel too intimidated to ask for advice.
"There's also the issue of women having so much to do that they just don't get round to sorting it out. When they've got a to-do list that covers home and work, they rarely get down to the 'sort out life insurance' at the bottom of that list."
Ms Anstee adds that she has advised many women who have realised they need to take out cover and have tried to go it alone on the internet, but have given up because it is so complicated. The combination of age, medical history, and level of cover needed, all have a bearing on the premium and it can be difficult to get the right balance on your own, she says. "A financial adviser can guide you through all of it, and take your budget into account to find the best fit for you, without costing any more money. Ask around your friends to see if they've used an adviser and get a recommendation. And don't be afraid to try a few to find one you feel comfortable with," says Ms Anstee.
"It's noticeable that when men call through to our helpline service, they are much more confident about their worth to their families," says Emma Walker, head of protection with Moneysupermarket.com, "whereas women tend to really underestimate their own value. Even those who have thought about cover will not calculate their full worth properly. A working mum will forget to calculate the cost of the role in the home and think only of protecting her salary.
"It is very easy to sort out critical illness cover. It can take only as long as sorting out car insurance. But with many vicious diseases, such as breast or ovarian cancer, claiming young women, it really does need to be done."
The fear of how expensive insurance cover is likely to be is also cited as a reason many women are slow to take out personal insurance, but even a small amount of cover can make a huge difference if the worst was to happen, say the experts. "The younger you sort out life insurance or critical illness cover the better," says Ms Anstee. "The premiums will be much lower not only because of your age, but because you won't have fallen foul of the conditions that can afflict women as they get older, such as back problems and depression."
According to Axa, the premiums for a 35-year-old, non-smoking woman wanting £100,000 worth of life cover, could be as little £7.33 a month. And for the same woman wanting £100,000 worth of critical illness cover, the monthly premium would be £33.02.
"It's not a great deal to have to pay," says Ms Walker, "but be sure you don't just go for the cheapest, but for the one that's right for you."
And as Mr McIver says: "I would encourage women to start focusing on their financial well-being, so that they avoid the potential financial meltdown they could find themselves in if they aren't protected."
Uncovered: 'I know I must protect my child'
Michelle Greaney, 39, is an office manager and lives in Clapham, south London, with her daughter Caitlin, seven. The pressures of daily life and choosing to rent rather than buy a property means that until now Michelle has put insurance on the backburner:
"Getting myself properly covered has been on my mind for a while, but there always seems to be something else that I need the money for, or I put off sorting it out because there is something else that needs doing first and it gets put on the backburner. But I know I need to do it.
"Making sure my daughter is looked after if anything happens to me is the most important thing I can do, so I will just have to afford preferably both life and critical illness cover.
"I will definitely have to budget and plan as all my money is accounted for, but I will do it – and soon."
Covered: 'We listened to our adviser'
Lisa Church, 29, is a PR consultant. She lives in Reading with her husband, Ian, 32, who is an architect.
"When we bought our house four years ago, our mortgage adviser said that life assurance and critical illness cover would be a good thing to do to ensure that if anything happened to either of us, we could continue to pay the mortgage.
"It's nice to have that bit of security, and because we sorted it out at the same time as the mortgage, we have not really noticed the premium as an extra outgoing. We will review it if any children arrive; at the moment it's just enough to cover the mortgage.
"If it wasn't for our financial adviser, I'm not sure if we would have considered the need for insurance.
"It's not something you think about until you have a scare or someone puts it forward to you."
Mark Dampier: An infrastructure fund that builds returns by taking different roads
Simon Read: Timeshare owners accuse Macdonald Resorts of land grab
Five Questions: Changes to car tax discs
How to save money: UK is crashing down the European league table for putting money away
A student's guide to financial survival: You don't have to drown in debt at university
- 1 Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
- 2 Kim Kardashian 'nude pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
- 3 Scottish referendum 'English question': Tory MPs call on David Cameron to create an English first minister in wake of No vote
- 4 Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
- 5 Free U2 album: How the most generous giveaway in music history turned into a PR disaster
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Archbishop of Canterbury admits doubts about existence of God
Portuguese academic says British are 'filthy, violent and drunk'
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...
Day In a Page
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize