Its true that every client is unique, but women in general tend to go about buying financial services somewhat differently than men do.
The typical woman lives longer than the typical man, and, if she is married, she is more likely to have a spouse who contributes a substantial percentage of her total household income.
Here is a quick guide to some of the ways that the differences may affect womens financial needs.
1. Women may live longer than they think.
New financial representatives learn that one of the main risks clients face is “living too long.” That risk is especially severe for women: The average life expectancy for a U.S. woman has increased to almost 80, or about 5 years longer than the life expectancy for the average U.S. man.
Womens longer life expectancy means that they face a greater risk of outliving their personal savings and having to depend on Social Security and traditional pension plans.
But the current debate about Social Security reform shows that women dare not depend solely on Social Security, and women are even less likely than men to qualify to receive traditional defined benefit pension income. Women who do collect pension income get only about half as much as men do.
For a married woman, a related consideration is the likelihood that she will outlive her husband and need to support herself for a period of time after his death.
For women, ordinary personal savings, permanent life insurance, individual retirement accounts and tax-deferred annuities are even more important than they are for men.
2. The longer women live, the more reason they have to fear inflation.
The typical woman is a cautious investor who is more interested in preserving principal than in earning a sky-high rate of return. A good financial representative should make sure cautious investors understand what rising prices can do to investors who simply preserve principal, without earning enough to compensate for inflation.
Even the most cautious women should consider diversifying their holdings enough to provide some opportunity for returns to outpace inflation.
3. Even if women live a long time, they could spend some of that time without being able to work or live on their own.
According to the Society of Actuaries Commissioners Disability Table, people have a 44% chance of suffering from a disability lasting at least 90 days between the ages of 35 and 65. In addition, 70% of people who become disabled for at least 90 days remain disabled for an additional 2 years or more.