International Women’s Day - Why protecting your current and future income matters
With International Women's Day approaching, it's a great time to focus on the importance of financial wellbeing for women.
With International Women's Day approaching, it's a great time to focus on the importance of financial wellbeing for women.
Even though women make up almost half of the workforce, many feel less confident about their finances compared to men and are less likely to seek advice from a financial advisor to plan for their goals. Women also tend to avoid getting insurance to protect their current and future lifestyles, and when they do, they often underinsure themselves1.
Women on average live longer than men but make less money during their working life
It’s well known that women on average live longer than men, which means they’ll also spend longer in retirement. For example, a 65-year-old woman in Ireland can expect to live for another 21.6 years, while a 65-year-old man can expect 19.4 more years2. But conversely, women earn less than men. The mean annual earnings in 2023 for women (€46,915) were 23% lower than for men (€60,816)3.
This income gap becomes more significant in people's thirties and forties, which is also when many start having children. The combination of a longer lifespan and a lower lifetime income means that financial planning for women is essential.
Women are less likely than men to have sufficient protection policies in place
Protection policies such as Income Protection and Life Cover can help bridge women’s financial risk gap. These policies are designed to increase financial security for individuals and their families in case of long-term illness or death.
A study in the UK reports that, besides the gender pay gap and pension gap between men and women, there is also a gender protection gap, especially when it comes to Income Protection1. Although the study finds that this protection gap is decreasing, women still tend to get less insurance than men, leaving them less financially resilient.
The need for financial resilience extends beyond the primary income earner
Financial resilience is important for everyone in a household, not just the main earner, whether male or female. It means being prepared for unexpected expenses or changes in income.
Even though many couples earn similar salaries, the income gap between men and women often widens when they start a family. It's important to think about how the family would manage if they suddenly had to rely on one income instead of two, even if the person isn't the primary earner.
When considering women's financial resilience, we should also account for the (monetary) value of the significant amount of unpaid work women do in addition to their jobs. For families with young children, it's important to think about the costs of childcare if the primary carer is (temporarily) unable to care for them, for instance when they get treatment for a serious illness. And even if no or little income is lost, increased expenses may still arise due to a serious illness. Having a protection policy in place can bring financial relief to a family at a time when it is most needed.
Protection with Zurich
In conclusion, financial resilience is essential for everyone. It empowers us to pursue our life goals—whether that’s buying a house, starting a family, or saving for retirement. Protection policies play a crucial role in helping us achieve these long-term financial objectives, especially when life doesn’t go as planned.
At Zurich, we offer a range of protection options and can create a personalized protection plan to suit your protection needs. If you are curious whether you have sufficient life and protection cover in place speak to a Financial Broker, or Zurich to see how we can help.
Sources:
1Swiss Re, Swiss Re’s Term & Health Watch 2023 Report
2Central Statistics Office, Life expectancy at 65 by sex, 2022
3Central Statistics Office, Distribution of Earnings by Gender and County, 2023
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