A recent AMP risk bulletin shows that women are vastly underrepresented when it comes to income protection insurance. According to AMP, women make up 40% of the insurance market and their total insured sum is only around 85% of the equivalent sum for men.
It is believed this is partly due to women undervaluing themselves and the importance of their financial contribution to the household. Many women do not believe it is worthwhile to invest in an income protection policy for themselves, particularly if their income is less than that of their spouse. Generally when life insurance or income protection insurance are discussed, the importance is placed on the male contribution to the financial wellbeing of the family.
The underrepresentation of women could also be due in part to the fact that income protection insurance and total and permanent disability insurance are more expensive for women due to a higher incidence of claims for TPD and longer duration of disability claims than men.
Breast cancer is the largest reason for claims by women for trauma insurance and comes in 5th place for claims for income protection insurance. Some insurance companies such as AMP are working to bring in breast cancer specific policies to assist with costs of treatment and therapy associated with breast cancer.
It is important that couples realise the significance of a secondary income when it comes to taking steps to safeguard their future and that of their families. The loss of that parent and their income can have a tremendous financial impact, particularly if that parent has played the major role in terms of child care and looking after the family home – taking out income protection insurance for just one partner only covers half the equation.