The American workforce is changing and so is the paycheck protection opportunity. According to a July 12 article in the Huffington Post, a Prudential Financial study of more than 1400 women found that 53 percent were the breadwinners in their households. The article cites other major gender shifts as well: Women under age 30 earn more than their male counterparts, women now comprise half of the workforce, and colleges are graduating more women than men.
What does this have to do with paycheck protection? The lack of paycheck protection against a disabling illness or injury is one of the biggest gaps in the financial planning portfolios of most Americans. Most people don’t hesitate to insure their property assets, and yet these assets are worth far less than the ability to earn a paycheck. The paycheck protection gap is especially significant for women. According to the Centers for Disease Control and Prevention (CDC), they’re both more likely than men to become disabled. They’re also less likely to own income protection insurance coverage.
Women need income protection more than ever before in history. Yet, convincing women of the need for paycheck protection can be challenging. Statistics from a recent study by The State Farm Center for Women and Financial Services reveal significant differences between the way men and women perceive the threat of disability:
- While more than half of men have at least done some research into how much disability insurance they need, only about four in ten women have researched the issue.
- Fifty-two percent of men have discussed the implications of a disability with a financial advisor, while only 37 percent of women have done so.
- Women are less likely than men to feel confident about job security (28 percent vs. 39 percent), covering basic expenses (25 percent vs. 25 percent), and being able to afford medical care (17 percent vs. 25 percent), if they were to become disabled.
Why aren’t more women protecting themselves from this risk? Most either feel it could never happen to them, that men are more at risk because of more dangerous jobs, or that it wouldn’t be worth the cost to purchase insurance they might never use.
A golden opportunity
These findings represent a golden opportunity for you to play a crucial role in women’s awareness of, and preparedness for, the unique risks they face. Here are six key steps you can take in that role:
- Talk to your female clients about their risk of disability and their options for protecting themselves.
- Educate women about the incidence and causes of disability to help them realize that the risk is real (Our Stat Pack can help).
- Help women understand the full economic impact a disability would have on their lives.
- Compare income sources versus anticipated expenses in the event of a disability. Make sure they know that the social security cookie jar is almost empty!
- Help them determine how much of any shortfall they want to address with insurance and what other strategies they could consider. (Our Wealth Preservation Plan script is a great tool for agents.)
- If they’re interested in disability insurance, help them clearly understand all of their options and the pros and cons of each.
- Don’t ignore stay at home moms. Even though they aren’t breadwinners, they play a vital role in the household’s financial picture. Without income, they won’t qualify for income protection, but they are perfect candidates for critical illness insurance.
- Watch out for your female business owner clients. They are perfect candidates for business overhead expense plans, key person policies, and other smart business tools.
It’s up to you
Back to the original question posed by this article: Are more than half of your paycheck protection clients women? If not, opportunity knocks! American women today play a crucial financial role in their households, and although many are concerned about the consequences of disability, neither they nor their financial advisors are really addressing the issue. That’s an open door for you to play a vital role in educating them and preparing them for the risks they face, and letting them know that what they don’t know can hurt them.
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