Women urged to consider life insurance as massive protection gap revealed

Women have been urged to revisit their life and critical illness insurance arrangements after a major new report found that millions have little or no cover in place.

The research from Aegon UK found that while seven in ten mothers see the financial security of their children as one of the top priorities in their life, almost half had never talked to their next of kin about what would happen if they died.

The research also found that women grossly underestimate their financial importance to their family and that almost three in five women aged 25 or over have no form of protection cover whatsoever.

We look at this worrying report and why you should make sure you’re adequately protected.

Over half of women aged 25 or over have no life or critical illness protection 

The What Really Matters? report from insurer Aegon revealed that 57 per cent of women aged 25 and over have no protection cover with a similar percentage having no idea how much State support they would receive if they fell ill.

Almost one in three (28 per cent) women admitted they would have to rely heavily on State help if they were unable to work for six months but the majority didn’t know how much this would be. One in four believed it was more than £87.55 per week and almost a third didn’t know.

Relying on State help can put a huge financial burden on you and your family. Compared to a women’s average annual income of £23,589, you would face a shortfall of around £21,000 if you were to rely on State support alone.

Next, we look at why your children are at financial risk if you have no life or critical illness insurance.

Just one in eleven 'stay at home' mother has some critical illness cover

Aegon asked mums with children under 18 to name the main priorities in their life. Children were overwhelmingly number one with the health (94 per cent), happiness (91 per cent) and financial security (71 per cent) of their children all coming up as the most important.

Despite this, more than two in five (41 per cent) mothers of young children don’t have any form of protection should they die or be rendered unable to work.

For stay at home parents, only 9 per cent have critical illness protection, making them half as likely as mothers of children under 18 (20 per cent) to have this vital cover. If you are at home and are unable to look after your children due to illness, the potential additional cost would be £7,549 per year (the average fees for one child in part-time nursery and another in an after-school club).

Women urged to discuss their plans with their next of kin

One of the most worrying revelations in the Aegon research was how few people haven’t even discussed how their family would be provided for in the event of their death or serious illness.

Nearly half (49 per cent) of mothers with children under 18 admit they’ve never had a single conversation with their next of kin about what would happen if they died. This is even higher for stay at home parents where 58 per cent haven’t spoken to those closest to them.

This reluctance to talk about these issues could be one of the main reasons for the protection gap, but women without life insurance or critical illness cover also cite affordability (37 per cent) as a key cause. Despite seeing their children’s financial security as a top priority, more than a quarter (26 per cent) don’t see life or illness insurance as a priority with 12 per cent admitting they have simply never considered it.

Dougy Grant, Protection Director, Aegon UK said: “Whether it’s a reluctance to discuss the unimaginable, a feeling that protection isn’t affordable, or simply a lack of awareness about the services on offer, there are plenty of reasons why women aren’t insuring themselves for the benefit of their family.

“There’s a clear disconnect between the peace of mind of protecting our most pressing priorities and our behaviour as a consumer.”