Women need a safety net from life insurance during cost of living perfect storm
Rebecca Huntley
There’s nothing new to say about the cost-of-living pressures. It’s here, it’s real, and it’s being felt by individuals and families across the country, even those with well-paid full time jobs.
With many women holding the pen on their personal and family finances, it’s women who are largely trying to find the balance between planning for the future and just getting through today.
And as living costs continue to rise, we’re being forced to make tough decisions and cut out things we previously deemed “essential” for our safety net– like life insurance.
I recently led research on financial resilience and well-being, done on behalf of the Council of Australian Life Insurers, which found that women disproportionately feel that cost of living has impacted their ability to pay for life insurance, compared to men.
The research found that many Australians feel that life insurance provides financial security and a sense of security for their loved ones, with 92% of Australians satisfied with services received from their life insurer directly.
However, 68% of participants were concerned that cost of living pressures would impact their ability to afford to continue paying for life insurance.
In focus groups, women of all ages talked about their high levels of anxiety that they won’t be able to deal with rising costs.
From how expensive everyday essentials have become, a sense of hopelessness about housing affordability, and an inability to save for unexpected expenses, challenges to our financial well-being are coming from every direction.
One participant, a mid-career level woman from Victoria, told me “it feels like everything is going up” and “there’s just this constant pressure with the financial part of everything”.
Conversations with women during the research revealed just how acutely aware of this ‘increase in the cost of everything’ we are, particularly in comparison to some male participants. Not only are women more likely to be the ones doing the supermarket shopping or paying for education and health costs, we are increasingly making the decisions in relation to things like insurance. This adds to the mental load we already carry.
Women particularly expressed fear of burnout and exhaustion, and yet our research found that 75% of Australians are unaware that life insurance can also include mental health cover.
Life insurers are the largest private sector provider of financial support for people experiencing mental health concerns and yet only a third of Australians would turn to their life insurance provider for financial assistance in the event they were unable to work due to a mental health challenge. The majority would simply turn to family and friends or perhaps try their hand at gaining government assistance payments.
Interestingly though, the research identified that Australians are also concerned about being underinsured. But, for some people, the cost of seeking professional financial advice is just too great. And so, again, family and friends are relied upon to offer up their free advice.
Add all of this to recent data[1] which shows a still appalling gender pay gap in this country, and it is clear that in this moment, Australian women face a “perfect storm” of financial pressures and challenges that makes for a very wobbly, untangled safety net.
And now, many women are walking through this perfect storm without any protection from the elements. We are less likely to have any form of life insurance or income protection compared to men. Aside from the burden of cost, this points to women not valuing our financial worth as much as men, not always seeing the need to insure ourselves because we are not the primary earner and not realising that our unpaid work is just as valuable. This can have long term implications on our financial security and wellbeing as we get older and reach later life stages.
Addressing this will take significant time and effort. The cost-of-living crisis will not be resolved overnight, and the many undue pressures women face in so many aspects of work and home life requires more than just reflection. It requires action.
There are small but significant steps that can be taken to make some immediate progress.
The federal government needs legislation to allow insurers to provide simple advice on products and help Australians navigate our current state. It is hoped that consultation and draft legislation for this will occur within months.
Through the research I conducted, one message was particularly clear: the financial advice needs of women are not being met.
More can and should be done to ensure women have access to suitable, affordable financial advice and insurance that protects them and their families when they need it most.
Rebecca Huntley is director of research at 89 Degrees East. She is a fellow of the Research Society of Australia.
By Dr Rebecca Huntley, director of research at 89 Degrees East and a fellow of the Research Society of Australia.
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