Life insurance: it’s something that most of us don’t enjoy thinking about or shopping for. Taking out a policy can bring to mind worst case scenarios that may be difficult to think about. The negative feelings people often have towards life insurance may lead to hasty decisions so they can “just get it over with”. But less than careful planning can leave people vulnerable to being underinsured—having less cover than they actually need.
Underinsurance is a big problem in New Zealand. Kiwis of all ages and incomes are underestimating the amount of life insurance cover they may need, creating a gap estimated at $195 billion.1 Women are especially likely to be underinsured. But why?
Overworked, but undervalued
Despite advances in equality, women worldwide still spend more hours on housework than men. Women in the Asia-Pacific region clock an average of four hours each day, whilst men average less than two.2 Women are also more likely to be their family’s primary caregiver,3 making them responsible for much of their household’s physical and emotional workload.
Salary.com, an American job site, estimated in 2019 that the work done by stay-at-home mums is worth around $266,000 NZD per year! Even women with full-time careers outside the home could be due a “mummy bonus”, as working women are also responsible for most of the housework and childcare.2
The work women do in the home is important. And yet, it is still undervalued, even by women themselves. A similar salary study found that only 7% of women thought the job mums do is worth a six-figure salary.4 Eleven percent valued household work at just $10,000 per year. This undervaluing of work carries over to life insurance. Women generally have lower amounts of life cover compared to their income than men do, something that’s even true for higher paid women.1
Whether you work outside the home or as a stay-at-home mum, the contribution you make is in many ways unmeasurable. However, your family would certainly notice if you were no longer able to support them.
Two income households would miss the extra money, even if you’re not the primary breadwinner. But beyond a traditional salary, the financial contribution women make to the home is often overlooked. Hiring someone to do jobs such as childcare, cooking, housekeeping, and shopping would cost a lot if you were unable to perform these tasks.
A terminal illness diagnosis or untimely death takes an emotional toll on families as well. Whilst money can never erase the pain, it could help cover mental health services or the cost of in-home care. It could also help provide for household expenses, giving your loved ones less thing to worry about during a trying time.
Life insurance is one way to value your contribution to the household and help protect your family’s financial future. Whether you earn a paycheck or keep the home running smoothly—or both! —life cover may be an important part of your financial planning.
A life insurance payout could help cover anything from lost income to expenses such as after school care, housekeeping or takeaway meals during busy times of the year. Many policies cover more than just death, with some paying the benefit early if you’re diagnosed with a terminal illness.
And there’s a silver lining when it comes to women and life insurance: it’s typically less expensive for women than for men! Several factors help women take advantage of lower premiums, including longer life expectancy and being more likely to seek preventative medical care.
Momentum Life can help
Purchasing life insurance is a big decision, but Momentum Life is here to help. Our agents can provide an obligation-free quote. Providing peace of mind to your family could be as easy a simple phone call.
A version of this article was first published on 13 September 2017. It has been updated to reflect more current stats and Momentum Life products.
Disclaimer: The information provided in this article is of general nature, and does not take into account your personal situation. You should consider whether the information is appropriate to your needs or seek professional advice, where necessary.
1. Massey University, Exploring Underinsurance within New Zealand. 2011.
2. Sydney Morning Herald, Mummy tracked: Why women still do many more unpaid chores than men. Feb 2016.
3. Ministry for Women, Research of the gender pay gap in New Zealand, Feb 2017
4. Business Insider Australia, Stay-At-Home Mums are Completely Underestimating Their Market Value. May 2013.