3 regretful reasons women don't have enough protection – and what you can do about it

In recent years, much has been made of the gender pay gap. Companies are working proactively to ensure equal pay, and this approach should also have an impact on the gender pensions gap that also exists in the UK.

What isn’t so commonly discussed is the protection gap between men and women in the UK. Overall, women are less likely to have life insurance, Critical Illness cover, and income protection than men. And, if they do have cover, its likely to be for a lower amount than their male counterparts.

Read on for three reasons women don’t have enough protection – and what you can do to ensure you have the peace of mind that your income and family are protected.

Too much focus is on a family’s main wage earner

An influential group believes that one of the reasons women don’t have sufficient protection is because the focus of advice is often on the main wage earner in the household.

Emma Thomson, Shelli Bentley, Catherine Trimble and Georgia d’Esterre from the Women in Protection executive committee say that women are often not thought of as the “breadwinner” and are therefore overlooked when it comes to protection planning.

They say: “In heterosexual relationships for example, women are still typically less likely to be the main earner […] indeed some advisers don’t always appreciate the risk to them and indeed their partner if they don’t have enough cover in place, instead prioritising the needs of ‘the breadwinner’.”

The truth is that, although the types of illness and causes of death vary between the sexes, the need for protection is broadly the same irrespective of gender.

As an example, FTAdviser reports that, in 2018, some 44% of Aegon’s Critical Illness claims and 41% of its income protection claims were made by women.

What you can do about this

When you’re working out what protection you need to ensure your family will be financially supported in the event of your death, illness, or injury, it’s vital to consider the “value” of both parties.

For example, if one of you stays at home to care for your children, you will still likely have a protection need. If you died, or were unable to look after your children because you had a serious illness, you may have to pay for specialist assistance or childcare to help out. Or, your partner’s income may fall as they have to take more time off to look after you and your family.

Just because one of you may not be “earning” in the traditional sense doesn’t mean you don’t need cover.

Women don’t have the same level of protection

Research published in FTAdviser has revealed that, while there is little difference in the number of protection policies being taken out by men and women, there is a significant difference in the level of cover they took out.

The difference for life and Critical Illness was 50%, with men taking out an average of £104,710, while women took out £68,916. 

This differential rose to 53% for life insurance, with men taking out an average £130,980 of cover, compared with £85,522 for women.

The largest difference – 90% – was for Critical Illness cover, where men took out £10,986 of cover, while women only arranged £5,790 of insurance.

Dave Miller from the firm who commissioned the research, admits he was taken aback by the findings. “I was quite surprised by the size of the difference,” he says. 

“We know the gender pay gap has some bearing, but we did not expect to see women taking out so much less cover than men. We know men are underinsured, but the level of cover among women is a serious problem.”

Here’s an example that illustrates the extent of underinsurance among both men and women.

Considering that protecting a mortgage is a common reason to take out cover, compare the level of life insurance against the average UK house price – £270,708 according to HM Land Registry’s house price index.

This leaves men with a life insurance shortfall of £139,728 and women with one of £185,186.

What you can do about this

Taking out too little protection could leave your family exposed to financial difficulties if the worst should happen. To deal with this:

• Work out carefully how much you need to protect your family. Our life insurance calculator can help
• Make sure you “index link” your cover, so your cover (and premiums) rise every year in line with inflation. This ensures the amount of protection you receive keeps pace with the rising cost of living. Read more about this 
• If you have a spouse or partner, consider taking out separate policies so you can tailor your protection to your specific circumstances. There are lots of benefits to separate policies – read about these here

Life insurance policies have also become more flexible in recognition of changing lifestyles. For example, companies such as Royal London now offer dual life policies enabling both parties to have their own cover, without the potential difficulties that having a conversation about two separate policies can lead to.

Women don’t know where to go for protection

Georgia d’Esterre from the Women in Protection executive says that the chances of women coming across protection in their daily lives were slim. 

“I have never seen an advert for Critical Illness cover in [any] female-orientated magazine title. You don’t go to the cinema and see adverts for income protection, or see some digital display ads featuring family income benefit in your local gym or John Lewis. 

“At best you may see some abstract Insta or TikTok post on your socials, but this won’t really give a female customer much information and it also may not be accurate.”

The network has called for better targeted advertisements, saying “we certainly want to encourage firms to use inclusive language and imagery to appeal to different sections of society; women, single people, gay couples, blended families etc. should all feel represented.”

D’Esterre said when she Googled “protection products insurance” one day about 4.5 billion results were returned.  “Can you imagine as an average consumer who has no knowledge of financial services trying to make head or tail of that?

“The industry doesn’t make it straightforward, and for women who are the primary carers, as well as the primary earner or working […] they simply do not have the bandwidth to be able to spend the time they need and want to research how to get advice on protection products, let alone start the actual process of getting cover in place.”

What you can do about this

If you’re not sure where to turn for the right advice, speak to us. We specialise in helping people to navigate the complex world of life insurance, Critical Illness cover, and income protection and to find the right cover for you.

We work with dozens of the UK’s leading insurers and so we can help you to find the right amount of protection, at the right price.

We can also help you if you have an existing medical condition. We work closely with some of the UK’s household names to arrange cover for customers with conditions ranging from depression to diabetes.

Get a life insurance quote today or contact us to speak to an expert.