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March 24, 2022 at 04:27 PM
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.
Caroline 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.