ANALYSIS: Women are undervalued.
That’s not a broad-brush statement, but a point of fact in the life insurance industry.
Partners Life crunched the numbers on the life, trauma and income protection policies of men and women.
What it found was a stark illustration of the relative lower pay of women, and arguably the undervaluing of unpaid work done by women.
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Partners Life did its deep dive as a part of International Women’s Day on Wednesday, and found women had between 14% and 25% lower sums insured than men for trauma, life, and income protection insurance.
And less than a third of people with income protection policies were women.
When it comes to life insurance, the average man insured by Partners Life was covered for $519,000 in the event of his death. The average woman was covered for $440,000.
Abigail Dougherty/Stuff
Georgia Eve is a young woman in Manly, Auckland who was considering donating an egg to a fertility place. But to do so she would have had to do a genetic test, which in NZ an insurance company can ask to see.
Kate Dron, chief actuary at Partners Life, says closing the gender pay gap would close the insurance gap, as would properly valuing all work done by women, whether inside or outside the home.
Couples working out what insurance they should have should not forget to calculate the value of the unpaid work the woman might do, such as caring for children or elderly family members, she says.
If she dies or becomes seriously ill or injured, this work will need to be done by a paid worker, and the household will need to fund it, she says.
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Kate Dron, chief actuary at Partners Life, says closing the gender pay gap would close the insurance gap.
It’s over 30 years since economist Marilyn Waring pointed out in Counting for Nothing that unpaid work, mainly performed by women, was the unmeasured backbone of the New Zealand economy.
Men tend to overestimate the amount of unpaid work they do, and underestimate the work women do, Waring says.
But Dron thinks it’s still being undercounted when it comes to insurance.
One factor that may have played a part in women’s relative under-insurance is that the insurance adviser industry remains male-dominated, but that is changing.
Dron says 40% of advisers who use Partners Life policies for their clients are now women.
“We have a female CEO, so we have probably attracted more female advisers than our competitors,” she says.
Women tend to live longer on average than men, but at certain points in their lives they are more likely to claim on some types of insurance.
Dron says women are more likely to claim in 30s and 40s on trauma policies, which pay a lump sum on the diagnosis of certain medical conditions, than men.
That’s because of illnesses like breast and ovarian cancer.
One insurance adviser who speaks passionately about that is Auckland adviser Stephanie Wiki, who contracted breast cancer, though is now well after a double mastectomy, and breast reconstruction.
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Stephanie Wiki is an insurance adviser who survived breast cancer. Her insurance got her and her family through.
“I’ve seen both sides of how it works in a household where someone gets sick,” she says.
Not only do costs in the household go up, but household income goes down.
She claimed on health insurance, trauma insurance and income protection insurance, she says. During some of that hard time, her husband was also unable to work.
But how does an industry overcome biases that may undervalue women and their work?
The answer is to build systems that enable people to assess their risks, and which really do put a price on women’s work, even if unpaid.
Partners Life ran some scenarios on its Evince system, which is used by insurance advisers to model the insurable risks in people’s lives.
One scenario was of a couple with an income of just over $140,000 and two pre-school children, in which one of the two stayed home to raise the children.
In the event of the non-worker’s serious illness, leaving them permanently unable to work, the total loss of value that could be insured was over $1 million.
The non-worker is still rarely a man, but it’s not as rare as it used to be.
GOLDEN RULES:
- Consider how you would cope with major illness
- Understand the differences between life, trauma, medical and income protection insurance
- Consider getting advice
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