We already know not enough people in the UK protect their incomes, with the past few months throwing this issue into sharp relief. However, this is an even greater concern for women, who are more likely to be underinsured in comparison to their male counterparts. Indeed, recent data from ActiveQuote shows that more than two thirds (70%) of income protection (IP) enquiries in April 2020 were from men[1].
Statistics like these are perhaps unsurprising and can be attributed to prevailing traditional stereotypes such as women historically being more likely to be a stay-at-home parent, working in lower paid jobs than their male peers, or taking less interest in their personal finances. All of these factors mean women are less likely to take out sufficient, if any, income protection cover.
Breaking down barriers
However, in the face of societal changes, it is time for the protection industry to challenge this thinking and ensure women are protecting their income just as much as men. Data from the ONS shows that one in four women are the breadwinners in their households [2], with further research showing that just over a third (34%) of UK SMEs are now female run- a 15% increase on 2017 [3].
The good news is that change is starting to occur. On The Exeter’s income protection plan for office-based professionals and clerical workers, the proportion of policies sold to females has been gradually increasing over the years and accounted for 45% of policies in Q1 2020. Research from ActiveQuote also showed a 20% rise in protection enquiries among women under 20, 20% higher than males in the same period [4].
While it’s certainly encouraging to see that more women are turning towards income protection to protect their income, particularly at a younger age, we need to ensure this trend continues to keep raising awareness of income protection among women.
A changing workforce
The UK labour market has also shifted to become progressively more fluid, with over 5 million self-employed workers, 1.7 million of which are women [5].
Self-employment and freelance work has become an attractive option for many, as people look for greater flexibility in their schedules and control over their workload. But despite these benefits, self-employed workers are more financially vulnerable compared to their peers in full-time work, mainly due to the lack of access to government grants and goodwill perks offered by employers.
Indeed, our recent research highlights the extent of this financial fragility amongst self-employed workers, with nearly a fifth (17%) saying they have no savings at all to fall back in financial hardship. Despite this lack of financial buffer, less than one in 10 (9%) protect their income through insurance.
Given that nearly half (45%) of respondents were female, there is clear market opportunity and need for education around the benefits of IP.
A tailored approach
So, how can more women be encouraged to take out income protection policies? Advisers in the protection industry are uniquely placed to help do this by kickstarting conversations with their female clients. Through their expertise, advisers can educate female clients of all ages and backgrounds to ensure they understand how having adequate protection can benefit their individual circumstances.
While these discussions can be difficult to initiate, they are essential to grow and diversify the market.
Advisers should consider what type of policy may be best suited to female clients. For example, products which offer a career break option might be well suited for women who anticipate balancing a work life with raising a family and therefore need to pause cover and start it again at a later date. For those who are self-employed, product features such as fixed benefit options can also help to protect against fluctuating incomes.
The role of women in the workforce has vastly changed and the traditional stereotype of men being the sole breadwinners in their households is being chipped away. The protection industry has a duty to ensure everyone’s income is protected, regardless of gender. Providers and advisers must continue working together to raise awareness of income protection and make sure women understand that protecting their income is essential.
Karen Woodley is head of sales at the Exeter
[1] https://www.covermagazine.co.uk/news/4015944/seeking-ip-reaches-%E2%80%98record-%E2%80%99
[2] https://www.royallondon.com/media/press-releases/press-releases-2020/may/rise-of-the-female-breadwinner-woman-earns-the-most-in-one-in-four-households/
[4] https://www.healthinsuranceandprotection.com/protection/surprise-20-rise-in-protection-insurance-among-women-under-20
[5] https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/coronavirusandselfemploymentintheuk/2020-04-24