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Mitigating Financial Challenges Facing Women

Mitigating the ‘Perfect Storm’ of Financial Challenges Facing Women

15 November 2023

According to a Sanlam survey, only 16% of women had income protection, compared to 20% of men, despite both groups having had an equal number of working individuals.

The lower take-up of income protection cover by women can take a tremendous toll on their future financial wellbeing. Karen Bongers, Product Actuary at Sanlam Risk and Savings, says risk cover can be crucial in mitigating the unique challenges women experience.

“Women generally live longer, experience unique healthcare risks, need to take time off work during maternity leave, and shoulder a considerable portion of caregiving responsibilities. These factors are a perfect storm, making it challenging for women to address current needs while planning for their future selves,” explains Bongers. “However, it’s crucial to consider the cost of having no cover in place. Are you prepared for a financial curveball, like being unable to work and earn for a prolonged period? It’s vital to sit down with a financial adviser and consider the worst-case scenarios to know which protective policies you need."

Bongers says there are many incorrect assumptions around risk cover, such as the belief that one can rely on a partner’s policies. “This assumption is far from accurate. It’s imperative that women have their own cover, tailored specifically for their needs. Even if affordability is an issue, having some cover is always better than none.”

Bongers strongly advocates for the following types of cover for women’s needs.

  • Protecting you and your dependants: Bongers says that death cover is critical for women who are primary or sole breadwinners, to ensure their dependents are cared for if they were to pass away. “Disability and income protection cover is equally important to provide protection should you be unable to earn an income, either temporarily or permanently. Additionally, benefits covering your children can alleviate financial stress should your child face a severe illness or injury.”
  • Protecting your health: In Sanlam’s 2022 claim statistics, 63% of women’s severe illness claims were for cancer, with 48% of these being for breast cancer. Conditions linked to complications around pregnancy, childbirth, and the puerperium accounted for 12% of sickness income claims. This includes C-sections and pregnancy loss. Bongers says, “Severe illness cover should be a strong consideration. And with cancer statistics being what they are, it’s vital to check that your policies have comprehensive cancer coverage, including cover for early cancer and mastectomies.”
  • Ensuring lifelong protection: On average, women live seven years longer than men. It's essential to make provision for future healthcare needs, including cover for frail care. Bongers says longer life expectancy also means women can benefit from the power of compound interest. “Apart from saving for retirement every month, look for ways to further boost your future finances through wealth-building benefits such as Sanlam’s Wealth Bonus.”

Which cover to choose when money is tight

Bongers says, “Tough money conversations today can prevent even tougher times in the future. Investing in cover now could save you from financial stress should the unexpected occur. Ask yourself the hard questions: How will your family get by if you can't earn? Work with a trusted financial adviser to have a plan in place.

“If affordability is a problem, consider ranges and options that are more affordable, but still provide good cover. Remember, if you cannot cover yourself fully, some cover is always better than no cover, and you can ask for premium holidays should you need them.

“Consider current as well as future affordability by asking how premiums will increase over time. The cheapest option today may be coupled with steep increases in later years. An adviser can help you determine a realistic financial roadmap that meets your risk cover needs.”

Bongers concludes, “Women are the heart and soul of our families and communities and play a vital role in our economies. At Sanlam, we are committed to ensuring they have the protection they need to thrive and live confidently, now and in the future.”