By Tasha Williams, senior research writer and Max Dorfman, research writer
Women contribute more income to their households and feel more secure in personal finances than previous generations. But they still face obstacles to taking responsibility for planning for their financial future and legacy.
Results from a new report,Lack of knowledge and confidence discourages women from buying life insuranceproduced by the insurance organizations LIMRA and Life Happens, indicates a significant difference in life insurance purchases between women and men and perceptions about these products.
Society has historically excluded women from its economic affairs.
Women did not have the right to open a bank account in their name before the 1960s. Prior to the Equal Opportunity Credit Act of 1974, banks refused credit to women simply because they were unmarried. In cases where women were married, the banks required the man’s co-signature. Until the decision SCOTUS Kirchberg vs Feenstra in 1981, state laws gave men unrestricted control over their wives’ assets – even if these were obtained without combined marital resources.
Women remain under-served by the life insurance industry.
Over the past five years, the proportion of life insurance policies for American women has dropped by 10 points to 47 percent, despite women expressing greater concern about the “economic, physical and mental impact of covid-19 on them and their families,” according to Report. In fact, 31 percent of women said they would get life insurance by 2021, and 42 percent of men said they would do the same.
Some women in the survey said they were worried about being treated differently by insurance companies and financial staff and were worried about sharing personal information with an agent or company.
Women still face obstacles to financial planning on equal terms.
The LIMRA study claims that only 22 percent of women “feel very knowledgeable about life insurance”, compared to 39 percent of men, with 80 percent of women misjudging the cost of life insurance. Researchers found that this “undermines women’s confidence in shopping and buying coverage and leads to fear of being exploited, creating an obstacle to entry.”
Data can play a crucial role in understanding how people make decisions, but they need context. Other research suggests, for example, that societal norms and prejudices may affect women’s self-confidence and their propensity to engage in topics from which they have historically been excluded. Beauties of the past continue to perpetuate inequalities:
Combined with the status of being an equal or primary income earner for their household, these barriers can be reinforced as women may consequently have less time to devote to increasing their knowledge and use of financial planning tools, such as insurance.
Barriers are falling, but there is opportunity to do more.
Throughout history, women have played a significant role in the economy as a whole and in their families, whether their contributions have been compensated or recognized. Today, lifestyle choices, a divorce, or the death of a partner can place nine out of ten women as the sole economic decision-maker in their household. The2021 Insurance Barometer Studyalso conducted by Life Happens and LIMRA, found that 43 percent of women say they need or will need more coverage – a total of 56 million individuals.
Market opportunity lies in engaging women where they are. Increased consumer education and satisfaction of gender-changing life cycle needs and associated risks can make this happen. Women represent almost 60 percent of insurance professionals, but only one in 10 holds leading positions, roles that drive the industry’s transformation. Driving forward with diversity and inclusion goals can lay the foundation for more innovation and equality.