Women should never be overlooked when it comes to protection.
When providing protection advice, it is not uncommon for the focus to centre around the primary breadwinner. If this partner passed away or was too ill to work it is very easy to see what household income would be lost.
There is nothing wrong with starting the conversation here, but household protection needs definitely don’t begin and end with the primary breadwinner.
In the past the primary breadwinner tended to be the male in the relationship and historic protection marketing was mainly aimed at men.
Unfortunately, this may have created a societal impression that protection is less important for women, which could not be further from the truth, especially now when it is most common for both partners to be working and in many cases the female partner is actually the primary breadwinner.
Despite this, research has shown that only 38 per cent of women hold life insurance and even less, 18 per cent, hold critical illness cover.
Yet it is important to provide holistic advice to cover both partners.
An internal mantra at Drewberry is that we aim to provide ‘holistic protection advice’, which starts with a thorough fact-find to understand a family’s situation before making a number of recommendations to protect them fully.
Whether a partner is the primary breadwinner or not, if they were to pass away or have to cease working due to ill health it can cause significant financial distress. For example, you may want to consider the following:
- Would the remaining partner be able to cover all the household bills with just their income alone?
- If the client has children, would it still be possible for them to work full time?
I remember one of my very first protection clients: a barrister earning a six-figure income and his wife, who worked as a part-time librarian.
I hold my hands up; I made the naive mistake of focussing solely on protecting him.
He actually raised the important question: ‘If my wife passed away it would cost me a lot of money in foregone income to do all things she does at home. How much do you think she should be covered for so I wouldn’t have to work less?’
At the time, Legal & General estimated that it would cost around £30,000 a year to replace a stay-at-home parent, so we arranged a family income benefit policy to cover his wife for this amount.
The example above goes to show that even if a partner is not earning an income (or a relatively modest one), it does not mean they don’t need protection.
A stay-at-home parent has a million jobs (childminder, chef, chauffeur, tutor etc) that would be very expensive to replace.
The jobs mentioned above are all physical in nature but the impact that the loss of a partner and mother/father can have on a family can be psychologically devastating.