Ask your female friends what their priorities are in life and those with a family will probably say it’s their children and the need to protect them. And yes this will be demonstrated by the love and attention the children receive. By the safety messages such as don’t speak to strangers, by making sure they know how to cross the road and drumming into them the importance of always wearing a seatbelt in the car. But are mums giving as much thought to their family’s long-term financial security?
More women are in control of the purse strings nowadays and many are the main earners in the household. Yet there are still thousands of women who are reluctant to take out protection insurance. Why is this? Advisers will be used to the excuses – it’s too expensive, I haven’t got time to talk to an IFA, my employer will pay me sick pay. And for many full-time mums they may not see the point if they’re not working. But with the cost of replacing a stay at home parent valued at around £30,000 a year, having some financial protection in place would mean that the family could afford to pay for childcare and for someone to carry out domestic chores. Even those who have experienced a friend or relative suffering from a critical illness can still be reluctant to take out protection.
There is no denying the fact that the subjects of serious illness or death are downright depressing. But the desire for a parent to protect their child should also extend to thoughts about how the family would cope financially if the worst did happen. What kind of an impact would a serious illness have on their life, career and their family? For many people, one of their biggest concerns would be surviving the illness and recovering from it. But it can be difficult to focus on getting better if there are worries about the next bill coming through the door or how new school uniforms and school trips are going to be paid for. When a person is living with a serious illness such as cancer, money worries can be as distressing as the illness itself.
So how do we persuade women that protection insurance is important and ensure they make greater provision for the long term by having a financial safety net in place? Last year, as part of a research project, I sat behind a one way mirror to observe a group of women talking about financial protection. One person pointed out that aside from the salary women will be bringing home, managing household tasks and looking after the children, often extended to the care of elderly parents too. She went on to say that these caring responsibilities could create different financial and emotional pressures. There will be feelings of guilt if the carer is unable to carry out these duties – even if it is due to serious illness – and then a worry as to where the money will come from to pay for additional support.
Another woman in the group, who had suffered a critical illness herself, mentioned the unexpected costs a serious illness could bring. Providers usually talk about how the money from a critical illness payout or income protection policy will help pay for the household bills and the mortgage. But as this particular lady pointed out there is an array of other costs such as medical treatment not available on the NHS, prescriptions or transport costs to and from the hospital.
The gender directive will be in place by December 2012 and will impact on price and underwriting. The cost of insurance for women is likely to rise and with it create a further barrier to buying critical illness cover or income protection. With these issues in mind it is important that we continue to promote protection and focus our marketing activity around the issues that affect women and their families. This is where case studies could really help. Reading emotional stories about someone who has actually claimed and how the payout has benefitted them, will bring home some important messages.
Protection insurance is all about having a financial safety net in place in case the unthinkable happens like long-term illness, long-term injury or an early death. It brings peace of mind and financial independence, knowing there will be no need to rely on family and friends. And talking about protection in terms of lifestyle will make it clear to clients that it’s not just about the mortgage payment. No-one likes to think about the nightmare scenario; but a bit of preparation could help keep the family financially secure whatever happens. And having a chat with as many female clients as you possibly can now, could help them to get cheaper premiums before the gender directive pricing changes kicks in on 21 December.
Originally published in Financial Adviser and FT Adviser
Over to you: What do you think of the Gender Directive? Have you started to target more female clients? Please share your thoughts on your experiences so far by leaving a comment below.
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