Financy* asks: For $43 a month, would you get life insurance outside of superannuation? Many women simply don’t, but should they?
If you or your family rely on your income in any meaningful way, then you should seriously consider life insurance.
It’s that simple and the cost might even surprise you.
According to Finder research, the average monthly cost to cover 75 per cent of a $4,000 monthly salary is $31 for a male office worker and $43 for a female office worker.
Women are continuing to claim more space in the workforce and fairer wages for our efforts – although there is still a lot more work to go as the Financy Women’s Index shows.
But in many situations, a woman’s earnings have become indispensable.
Whether we live independently, contribute to our family’s finances or work as the primary breadwinner, our wages may support the people we love, pay for the home we live in or simply allow us to fund the lifestyle we prefer.
So why, when our earnings are integral to our own lives and that of others, do so few women have life insurance?
Worryingly, a recent Finder study revealed that just 33 per cent of women reported having any life insurance at all, compared to 48 per cent of men.
If something were to happen, life insurance can do so much more than just give a lump sum to your family when you die.
It can also replace your wage if you become too sick or injured to work, pay a lump sum if you’re diagnosed with a critical illness and, in some cases, even pay out if you’re made redundant.
Consider the following:
- What would happen if, tomorrow, you became too sick or injured to work?
- If you live alone, how long could you cover the rent or mortgage?
- If you have a partner, could you still cover your everyday expenses with just one income?
- If you’re a parent, would you need to hire someone to take care of your children?
These are questions that every woman should ask themselves – whether they’re working part time, full time or are self-employed.
Life insurance, in one form or another, allows people the time to recover without worrying about paying the bills.
If the worst happens, it leaves a grieving family with financial security, rather than uncertainty and stress.
There are factors to be aware of though. Of all Australians who have life insurance, over 70 per cent have it through their super.
While this is the cheapest way to cover premiums short term, it does have its drawbacks.
The premiums are taken directly from your balance, so while you don’t feel the financial pain day to day, it does affect your nest egg later in life.
Plus, the insurance offered through super is generally capped at around $100,000-$200,000 – and more conditions are attached.
If you take the jump and buy life insurance directly from an insurer, or with the help of a broker, you can expect a more comprehensive policy – for a price.
Income protection insurance, which typically covers 75 per cent of your standard earnings if you’re unable to work, is generally more expensive for women.
*Financy creates and publishes a variety of content on women’s money matters.
This article first appeared at financy.com.au.
