For the sixth consecutive year, LIMRA statistics indicate that the percentage of underinsured women has increased – and the current wave of inflation and higher prices suggests this could exacerbate the situation.
According to LIMRA, about 46 per cent of women report owning life insurance, compared with 53 per cent of men. However, says LIMRA, a greater proportion of women than men recognize the need for coverage (44 per cent versus 38 per cent).
Chantal Mackenzie, regional VP for Alberta South for Canada Protection Plan, said all Canadians are looking to save wherever possible in these days of higher costs. “Unfortunately, and understandably, this could likely compound the problem even further with more women more inclined than ever to hold off on purchasing necessary insurance needs,” she said.
According to the LIMRA study, 39 per cent of women already believe that life insurance is too expensive. Mackenzie said this is a harmful and misleading perception. For women with families and partners who are not already covered, it’s crucial they understand that life insurance is a critical pillar of financial security and the longer they wait to buy, the more expensive it’s going to be.
The LIMRA study indicates that 68 per cent of life insurance owners report feeling financially secure compared to 47 per cent of non-owners.
Old-fashioned thinking
She said the industry is fighting a number of long-standing, antiquated beliefs, particularly that men are the chief bread winners and therefore should have life insurance coverage. “Historically we’ve seen men dominate the insurance space as old-fashioned thinking led us to protect the people who were earning the income, but this grossly undervalues working women as well as women who don’t work but manage the household. There’s been a significant mindset shift but it’s important we don’t lose all the painstaking progress we’ve made.”
Another reason why more women aren’t buying (more) life insurance is because of their lack of financial literacy skills. For many women, said Mackenzie, life insurance is simply not on their radar. At the same time though, she said she’s seen tremendous progress in the industry, which is now supporting and educating women in understanding the importance of knowing their worth and the financial tools available to them.
Ensuring women are engaged in financial planning process
She said she’s also seeing more advisors focusing on the female market. Good advisors who recognize that some women have had bad financial experiences are now focusing on the need to understand their clients and the importance of involving them in their planning. “This will help ensure that both the husband and the wife have a true understanding of the financial plan and are both engaged in the process. Women who need to find their voice and ask for what they want and need must be provided with the environment where they are comfortable in doing that.”
She said a number of advisors are holding workshops focused just on women’s finance or health challenges, for example, and they are providing checklists or points of knowledge. More advisors are conducting surveys and focus groups specific to females to help them better understand their needs and challenges while providing their potential clients with better educational tools and support.
The LIMRA study also noted that financial insecurity transcends generations and is highest among Gen X (49 per cent), followed by Millennials (44 per cent), Gen Z (42 per cent) and Baby Boomers (33 per cent).
