Equal insurance for equal risk
Remember Miss Moneypenny? The secretary whose fondness for the
roguish James Bond was second only to the dedication she had for her job as
secretary to M, in Ian Fleming’s 1953 novel, Casino
Royale.
Like many women in the workforce in the 1950s, Miss Moneypenny’s
earning capacity was limited. She received less pay than a man for work of equal
value, was more likely to work in care industries or subordinate roles, and
would have been expected to leave employment once she married to focus on the
care of her husband, children and home. Even in
Fast forward to 2009 and dual-income households are now the norm.
Today almost 4.8 million women are in some form of paid employment, with a
labour force participation rate of 58 per cent. More than 30 per cent of
*
Women – Towards Equality, 2008, Department of Foreign Affairs and Trade, www.dfat.gov.au/facts/women.html.
†
Ibid.
Yet while women’s presence and influence in the workforce has
dramatically increased in the past 50 years, women have not acted to protect
themselves and their earning capacity in the same way as their partners,
husbands and brothers.
Women’s income still vulnerable
Logic suggests that women are no less likely to suffer from
illness and injury than men, yet they still don’t exercise the option to cover
themselves with insurance.
Despite the increased presence of women in the workforce, they
typically spend less time in the workforce than their male counterparts. This is
partly explained by taking maternity leave, but women are also more likely to
retire early and they’re often the ones who take time off work to look after
children or elderly relatives.
Less time in the workforce means women accrue less savings, less
superannuation and are less able to recover from financial setbacks than their
male counterparts. Women also live longer than men on average, so these setbacks
can leave women more financially vulnerable over a longer period of
time.
Lack of awareness and
understanding
Research has demonstrated disturbingly low levels of awareness and
understanding among Australians when it comes to life insurance. The Investment
and Financial Services Association (IFSA) found that cost is one of the biggest
barriers to people taking out life insurance, with over 80 per cent of people
saying it is ‘too expensive’, yet at the same time 61 per cent over-estimating
the cost. In fact, the monthly premium for a 35 year old female non-smoker
applying for $500,000 of life cover is generally as low as
$25*.
Australians are not averse to insurance in general: 83 per cent
insure their car, but only 31 per cent insure their ability to earn an income†.
This is a chronic state of underinsurance, considering Australian Bureau of
Statistics reports that more than three in four Australians will be diagnosed
with a serious illness in their working life‡, while one third of women and a
quarter of men will suffer cancer during their
lifetime§.
What types of insurance should women
consider?
·
Income
protection typically
covers up to 75 per cent of your income if you can’t work temporarily due to
illness or injury.
·
Business
expenses insurance is vital if you are self-employed
or run a business. Should you become ill or incapacitated, you will be able to
cover your fixed business expenses, which could include the cost of finding a
temporary replacement to carry out your work duties if needed.
·
Trauma
insurance can help protect you from the
costs associated with diseases like cancer, whether you are in the workforce or
not. It can pay a lump sum on diagnosis to help cover the costs associated
with treatment.
·
Life
and/or Total and Permanent Disability (TPD) insurance can provide a lump sum to you or
your beneficiaries if you die or are seriously disabled. This can be vital if
you have a family or a mortgage which relies on your income. Even if your time
is spent at home looking after your family, your death or disability may require
hiring a nanny or housekeeper to provide the care and services you previously
performed.
* Industry Facts Page, LiveWise, IFSA,
www.lifewise.org.au.
† Ibid.
‡ Ibid.
§ Cancer in
How to make insurance more
affordable
There are several different strategies that may reduce the cost of
premiums and it is worth talking to us before you take out insurance to find out
whether they apply to your circumstances. For example, income protection and
business expenses insurance premiums are often tax
deductible.
You may also be able to reduce the effective cost of life and TPD
insurance by linking your policy to your super and using your pre-tax salary to
pay premiums (however, there may be some restrictions to your benefit in this
scenario).
Get the cover you need
Try putting a value on everything you do – not just at work, but
at home too. Consider what it would mean financially if you were off your feet
for a while. Now consider the cost of any necessary treatment, rehabilitation,
or modifications to your house. It could easily run into tens of thousands of
dollars. Many of the comprehensive insurance products available these days can
provide cover when you need it most.
To help you get the right cover that’s structured to suit your
needs, please make an appointment with our office
today.
The risk of illness
·
1.4
million Australians have a disability associated with a cardiovascular
condition.¶
·
1
stroke event occurs every12 minutes in Australia.¶
·
More
than 6 million Australians are affected by a musculoskeletal
condition.¶
·
One
in four Australian women and one in three men will be diagnosed with cancer by
the time they are 75.¶
·
The
number of new cancer cases diagnosed in
·
By
2031, it is projected that 3.3 million Australians will develop type 2
diabetes††, the most common form of the
illness.
Unfortunately, disease and illness are increasingly common as we
enjoy longer lives.
To protect yourself – and the ones you love – make sure you’re
covered with the right level of insurance.
¶
**
†† Diabetes
For more information on how Momentum Wealth can assist you
with your Risk Insurance needs, contact Justin McManus on
1-800-000-159.
Justin
McManus is a representative of AXA Financial Planning Limited, ABN 21 0005 799
977 AFSL 234663. This information has been prepared without taking account of
your objectives, financial situation or needs. Before acting on this information you
should consider its appropriateness, having regard to your objectives, financial
situation and needs.
