Sickness Doesn’t Discriminate, So Why Should Insurance?

Everyone can get sick or injured. But when it comes to protecting their lifestyle with insurance, it seems females have some catching up to do.

Historically speaking, insurance was sold to the main breadwinner. And more often than not that was the husband.

Today men still earn more, on average, than women. But the gap is closing fast – Australian women now earn 92% of male incomes. And many women out-earn their husbands. So you’d expect more women would be taking out life insurance to protect their income and their lifestyle.

But despite women making up 45% of the workforce, they still represent only 15-20% of all insured incomes.

It’s not just about income

Women are often more financially vulnerable than men – mainly because they typically spend less time in the workforce.

This is partly because of children. But women are also more likely to retire early. And they’re often the ones who have to take time off to look after children or elderly relatives.

Less time in the workforce means less savings, less superannuation, and less of an ability to recover from financial setbacks.

And since women live longer than men, these setbacks can be even more financially damaging over time.

What types of insurance should women have?

Income Protection typically covers up to 80% of your income if you can’t work temporarily because of sickness or injury – making it extremely valuable for working women.

To protect yourself against diseases like cancer, you can take out Recovery (also known as ‘Trauma’) insurance. It can pay a lump sum on diagnosis – helping you replace your income, and assist in covering 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 and/or a mortgage to look after.

If you’re self-employed or run a business, you can also cover your fixed business expenses if you can’t work temporarily because of sickness or injury. This could include the cost of finding a replacement if you need one.

It’s cheaper than the alternative

You may not be aware of how much cancer treatment costs. The Cancer Council of NSW estimates a woman with breast cancer could be faced with over $40,000 in lost productivity and out-of-pocket expenses. And that the average lifetime cost of cancer equates to 1.7 years of a household’s income.

This helps put the cost of insurance in perspective.

Strategies to make insurance more affordable

There are a number of ways you can reduce the effective cost of your premiums.

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 taking it out inside super – using your pre-tax money to pay premiums. Bear in mind there may be some restrictions on your benefit if you insure inside super.

If you’re eligible for the Government co-contribution you may be able to use this to help pay your insurance premiums. This also gives your retirement savings a valuable boost.