Women driving insurance decisions on car, home and health cover…

… And men more likely to protect their life and pet

Women driving insurance decisions

Women are more likely to take out home, car and health insurance whereas men are more likely to hold life1 and pet cover, according to financial protection research2 by Australia’s leading specialist life insurer, TAL.

The research found that 41% of men hold a life policy compared to 33% of women. This includes the various forms of life cover: disability, income protection, critical illness/trauma/crisis, and end-of-life insurance.

The poll of more than 1200 people asked men and women which insurance policies they currently hold and found that both genders are more likely to cover their home and car rather than their most important asset of all, their life and income earning ability.

According to TAL Group CEO and Managing Director Jim Minto these results reflect the long term trend for primary earners to have more life cover than secondary earners and stay at home carers.

“Life cover has long been considered the domain of the primary earner, and historically this has been men but the need for life cover for secondary income earners and stay at home carers is just as high as for the primary earner,” Mr Minto said.

“While the gender pay gap remains an issue despite recent improvements, so too the disparity between the sexes in terms of life cover continues. This is despite a gradual bridging of the life cover gap being aided by greater accessibility through more direct channels, a greater number of female advisers and default cover through superannuation.”

The latest underinsurance figures for Australia by independent actuaries Rice Warner show total underinsurance at $10.6 trillion, with the disability gap increasing 10% in 2012 to $7.9 trillion, the income protection gap up 30% to $589 billion and the end-of-life insurance difference down 30% to $2.166 trillion.

The TAL financial protection research found that women are more likely than men to have made decisions around home and car insurance. Women are more likely to hold full car insurance (79% versus 71% of men), home building insurance (55% versus 49% of men) and home contents (70% versus 61% of men).

Table 1: Insurances held by gender

Analysing the research across the different age groups, baby boomers were most likely to hold full car insurance (83%) compared to their Gen X and Gen Y counterparts (77% and 65% respectively).  The same trend was observed for life cover, home buildings and home contents insurance.

Reflecting a likely higher take-up of technology amongst the young, the research found that younger people were more likely to have insurance cover for their phone, tablet or other portable device.

Mr Minto concluded: “We undertook this survey work to try to better understand the priorities of different demographics. We can see that young people who are healthy and often with no dependents may not see the value in insurance products such as life and disability insurance and income protection.

“People need to understand that life insurance not only protects the value they have created in their lives already, but protects the future they imagine and aspire to. It protects one’s way of life.

“The challenge for the industry is to change people’s mindset so that they better understand the importance of these products and view them as being as essential as home or car. The Government has made life and disability insurance mandatory through its MySuper reforms to help reduce the huge underinsurance gap in Australia but more needs to be done to incentivise people to have adequate financial protection.”

Table 2: Insurances by generations