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Life Health > Annuities > Fixed Annuities

Women Are Underserved and Underinsured

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What You Need to Know

  • The author contends that women tend to have different planning needs than men.
  • The gaps in life insurance and retirement planning are often vast.
  • Long-term care planning is another area of concern.

It’s well established that gender inequalities still persist throughout society, but the disparities between men and women in today’s world can creep up in unexpected ways.

Across the spectrum, women have disproportionately felt the economic and social impact of the ongoing COVID-19 pandemic.

The pandemic has further exposed the unique challenges women in our modern world face, deepening existing disparities and creating a gender chasm that could have a long-lasting societal impact.

Women and Work

In particular, there is a striking correlation between the so-called “Great Resignation” and women leaving the workforce.

For the first time in 30 years, women have taken a step back — departing the workforce at twice the rate that men have.

For mothers, the figures are even more stark, with approximately one-third of mothers reducing their hours or leaving their jobs since March 2020.

While there are a number of factors at play, this trend is largely emblematic of one thing: childcare.

From school closings to rising day care costs, working mothers have borne the brunt of the pandemic and as a result, are exiting the workforce in droves.

Women and Wealth

How does the Great Resignation of women intersect with the financial services industry? When it comes to serving female clients, there is often the question of whether a gender-based approach is even necessary.

After all, generally speaking, women and men have similar goals and objectives for planning for their families, and have comparable needs in terms of risk protection, wealth management, and retirement.

However, it is no secret that women face different risks and challenges than their male counterparts, which can hinder their ability to achieve their financial goals.

In particular, as the Great Resignation has taught us, women, by in large, are still the primary caregivers for their families.

This extends not only to child rearing, but to elder care for aging parents or other relatives.

Most families rely not only on the woman’s income, but on the child and family care services she informally provides in order to be financially secure.

Additionally, as women exit the workforce, they not only lose income and earning potential, but they also miss out on the opportunity to take advantage of employer-sponsored retirement programs.

This can have a long-term, downstream impact on the female client’s ability to adequately save for retirement.

Lastly, women statistically live longer than men, but are also more likely to suffer disabilities after age 65, meaning there is often a greater concern about outliving assets and a heightened need for long-term care.

The Life Insurance Opportunity

Given the current planning environment and taking into account the unique challenges women face towards their goals, life insurance is often a core component of a holistic financial plan.

The gender gap is further highlighted by a recent LIMRA study which found that just 47% of women have life insurance coverage compared to 58% of men, and that number drops even further for minorities and younger women.

The pandemic underscored the true costs of care — which are exorbitant enough that some mothers have needed to step away from work either temporarily or permanently.

Many are aware of the benefits of life insurance for income replacement, but as it relates to women’s multifaceted needs today, there is clearly an opportunity for conversations around insuring not only women in the workforce, but those who stay at home and provide other valuable services to their family.

The same LIMRA study found that women are not only more likely to be uninsured or underinsured, but in particular, they are less knowledgeable about life insurance and its benefits than men.

Now is an opportune time to talk with female clients and prospects about the benefits permanent life insurance can offer to help address the specific planning challenges faced by women, including:

  • Protecting the family by replacing lost income, providing for childcare expenses, funding college costs, and providing retirement security;
  • Providing a potential for tax-advantaged supplemental retirement income; and
  • Providing a potential source of funds to help pay long-term care expenses.

Engaging Female Clients

In addition to the unique planning challenges women face, women in general continue to feel underserved by the financial industry.

There are a number of ways financial professionals can engage their female clients and work to build loyalty and rapport, including making it a priority to request joint meetings with spouses and building flexibility into meetings.

Additionally, women often value empathy and seek professionals who provide tailored advice based on understanding their unique family dynamics and goals.

With this in mind, consider the following conversation starters:

1. “Tell me about your loved ones and what they would need financially if you were not here to take care of them.”

This question gets to the heart of their protection needs.

Women with small children will likely need to consider dependent care, while mothers with older children might be more concerned about ensuring they have enough money for college.

Today, women have complex goals and wear many hats.

Income replacement is one component — but not the only factor to consider when helping to analyze the true financial impact she has on her family.

2. “What are your goals and dreams for retirement”

Understanding what drives your client is key.

Having her paint a picture of what retirement looks like to her can help to drive the planning conversation.

The second part is to come up with a full assessment of her retirement plan — what does she have, what does she need, and ultimately coming up with a plan for any shortfall.

3. “Do you have a personal experience with longevity in your family?”

The reality is that women live longer than men and as such should factor that into their planning goals, particularly if they have a family history of longevity.

4. “What are your plans for long-term care?”

This great open-ended question can lead to multiple answers.

You may find that some of your clients have a misconception with regards to Medicare and/or Medicaid.

If they express that those are the ways to fund long-term care, now is the time to help educate them on what will and will not be covered and consider product offerings available on the market to help pay for long-term care.

5. “Have you had a personal experience with long-term care?”

Women commonly are the caretakers for older relatives and elderly parents.

A personal experience with long-term care will often help to drive the desire to proactively plan.

A Silver Lining

Although the enhanced challenges women face in light of the pandemic are concerning, the silver lining may be that the pandemic has raised consumers’ needs around protection planning, mortality, and general well-being, with 31% of consumers indicating that COVID-19 has made them more likely to purchase life insurance.

Financial professionals who tap into this underserved market may be well positioned to help close the coverage gap and provide meaningful solutions to help women achieve their financial goals.

Carly BrooksCaroline Brooks, JD, CFP, CLU, is assistant vice president and counsel at John Hancock Advanced Markets. John Hancock insurance products are issued by John Hancock Life Insurance Company (U.S.A.), Boston, MA 02116 (not licensed in New York) and John Hancock Life Insurance Company of New York, Valhalla, NY 10595. MLINY032522576-1.

(Image: Monkey Business Images/Shutterstock)