Women Are Not Buying Enough Life Insurance

Discovery Life has issued a serious warning to women. Yes, women have made huge strides in the workforce. Today a large percentage of them are the breadwinners for their families.  However, life insurance ownership among women is lagging behind their other achievements.

Discovery has quoted the results of a recent study by MetLife, a major life insurance firm in the United States. Men with small children insure their annual family income by five times. However, women in the same position insure their annual household income by just three times.

These astonishing figures prove something. While women realise the importance of financial protection against unforeseen financial disaster, many do not have adequate cover. They have no protection in the event of injury, disability or death.

Life insurance and women: the reality

Statistically speaking, women are less likely than men to insure their lives.  About 70% of women believe that life insurance is important, compared to 62% of men. Yet, according to the Life Insurance and Market Research Association (LIMRA), women typically have only 69% of the life cover that men have.

Discovery Life Women and Life Insurance

Despite the fact that life insurance provides financial protection to safeguard the beneficiaries of a woman’s life insurance policy, women are simply not doing it right. If a woman passes away, suffers a severe illness or becomes disabled, she could well leave her family destitute. They would have to foot the medical bills, funeral costs, estate fees and outstanding debts. Women may be unaware that life insurance policies can be structured to cover these eventualities perfectly.


Why do women not buy life insurance?

1. Women believe that buying life insurance is difficult

Insurance terminology and the wide range of options available can be daunting. That’s why many women believe that buying life insurance is an unnecessary hassle. However, women should be aware that insurance firms have simplified the process of signing up for life insurance. An accredited financial adviser will be able to evaluate your needs. He or she will provide a range of options that is easy to understand. The options will fit the circumstances of the life assured. A good financial adviser should streamline the process. He or she should by helping the buyer of insurance to complete the necessary documentation. The adviser should arrange medical assessments at home and submit the paperwork to the life insurance company.

2. A lack of knowledge about life insurance

It is estimated that only 34% of women in South Africa have ever bought life insurance. And just 19% of them have consulted a financial adviser about life insurance. Women’s financial knowledge is simply not keeping pace with their achievements in the workplace.  A lack of knowledge is often driven by two factors. Firstly, women may not understand what type of insurance they need. Secondly, they are unsure how much insurance they need. In both cases, a financial adviser can explain the various options and provide all the information you need to make the right choice for your financial situation.

3. Some women may not see their income as a family necessity

The perception still exists in society that men’s salaries are somehow of greater value than women’s salaries. This is because, until relatively recently, men generally earned more than women. However, now that society has changed radically, this is not necessarily the case. No matter what the marital status of a woman, the chances are that she requires the right level of life insurance in case something unforeseen happens to her. The death, severe illness or disability of a breadwinner can place great pressure on a family’s finances. Life insurance protects against this and makes coping with disaster much easier.

Is life insurance necessary?

For all women, life insurance is vitally important. It provides the funds needed to pay off any outstanding debt you may have, it can replace a sudden loss of income, and it can provide for your loved ones when you are not able to – such as paying for private schooling or a university education for your children.

More and more women are becoming the breadwinners of their households, giving them increased financial responsibility. Life insurance does more than just cover your income. If you are a stay-at-home mom, you know that what you do is just as important to your family’s welfare as working outside the home. You might think that, because you don’t earn a salary, you don’t need life insurance. However, if something happens to you, having adequate cover provides your family with financial support during a difficult time – support that they could use to do things like hiring an au pair, paying medical expenses or taking time off work.

In addition to being breadwinners and stay-at-home mothers, women are more likely to support elderly parents. Without life insurance, it can be difficult to financially protect ageing loved ones if anything unexpected happens.

What are the options?

Life insurance provides various levels of financial protection. It protects your income to help your family in a time of need, it can help cover the work you do as a stay-at-home mom and it financially safeguards your family and the people you care about. For example:

•    Life cover pays out a lump sum to cover immediate costs if you pass away, such as funeral costs, outstanding debts, estate settlement fees and any medical expenses related to your death.
•    Severe illness and disability cover pays out a lump sum, which helps pay for medical and other expenses if you suffer a chronic illness or become disabled.

There are also other forms of cover, such as income protection (which provides you with a regular income if you become severely ill or suffer a permanent or temporary disability) and education protection (which pays for your child’s primary school, high school and tertiary education if you aren’t able to).

How much is enough?

According to research conducted in March 2013 by True South Actuaries & Consultants in South Africa, the ideal ratio of a comprehensive life insurance policy is 37% life cover, 53% disability cover and 10% severe illness cover.

But we’re all different, which means that our needs are different. The best way to understand your insurance needs is to understand your current levels of debt (how much money you owe) and what your loved ones would need to survive without your financial support (to cover day-to-day and future living expenses). Other aspects to consider include your income, lifestyle and any pre-existing medical conditions.

It’s recommended that you decide on the right level of cover with the help of a trusted financial adviser, who can holistically evaluate your situation using a financial needs analysis. Your financial adviser should also help review your cover regularly and when your circumstances change to make sure that you’re sufficiently covered as you go through life.

Discovery Life issues an open invitation to women

Whether you’re the main breadwinner or a contributor to the monthly household income, the void left when you’re no longer around or unable to work will be deeply felt by your family. Even as a stay-at-home mom, you may want to take out a policy that provides for your children’s education or pays for a caregiver if anything unforeseen happens. You can find out more about our range of award-winning products here on our website, or speak to an accredited Discovery Life financial adviser.


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All info was correct at time of publishing