When selling to women, many agents and brokers start conversations with a standard list of questions regarding marital status, children, income, financial goals, household expenses and other related topics.
This type of information is a great start, but it’s more important than ever for producers to pay close attention to their female clients’ lives, as there are two trends that likely affect women’s perception of voluntary insurance:
- The divorce rate among people over 50 has doubled since 1990, according to the 2010 census report.
- More than half (54 percent) of employed individuals who are part of the sandwich generation — meaning they care for their children and parents — are women. Of those, one-third do not have a spouse or partner with whom to share costs.
These stats are important for agents and brokers. They disprove any assumption that women who are 50 and older are married with access to their husband’s income. They also show that many women are now caring for both children and their parents — sometimes without any financial backup.
Furthermore, women often take care of their families before taking care of themselves. This in itself can create a financial burden if women’s caretaking tendencies mean they let an illness progress or postpone purchasing important coverage to help protect their assets. Coupled with the fact that, according to the 2012 Aflac WorkForces Report 2, 66 percent of women would not be financially prepared for an unexpected emergency, agents and brokers have broader considerations to contemplate when selling to female workers.
Approximately one in three baby boomers are unmarried, with the vast majority either divorced or never married. Why is this important? According to the 2010 Consumer Expenditure Survey, singles spend a larger share of their budget on food, housing, taxes and health insurance than their married counterparts. These higher expenses could be why only 67 percent of singles are saving for retirement, compared to 85 percent of married couples. In fact, 70 percent of women have even delayed retirement because they do not think they are financially prepared.2
The lack of preparedness can be a costly risk when it comes to retirement. Whether divorced or never married, single women will have to rely on their own Social Security earnings and will probably spend their lives in a higher tax bracket. These single women will not have a spouse’s IRA, 401(k) or pension to relieve financial burdens as they age. Similarly, in the case of an unexpected illness or injury, singles might have fewer funds available to help cover the related out-of-pocket and day-to-day expenses.
Consider that a female worker with a co-insurance ratio of 80/20 who is facing a hospital stay that costs approximately $10,000 will need to cover a minimum of 20 percent of her medical bill, along with any deductibles and additional health care expenses not included in her plan. That means paying about $2,000 out of her own pocket as well as keeping up with related or daily living expenses while she is hospitalized and recovering.
Therefore, it’s essential that brokers and agents educate their single female clients about benefits they may not have previously considered to ensure they are taking all measures to protect their finances. Outside of major medical insurance, many products are designed to fill coverage gaps in the instance of an illness, injury or death. Cancer, critical illness and hospital indemnity plans are examples of voluntary or supplemental insurance policies that can provide additional financial protection if an illness or injury were to strike.
Not only can voluntary insurance help brokers and agents diversify product offerings and generate new revenue sources, it can also provide a great service to your clients by addressing specific financial needs at a time when they need it most. Plus, these types of plans don’t add benefits costs to the employer.
Women’s changing family responsibilities also affect what benefits options they elect. Women who are part of the sandwich generation need to protect their finances, so they can continue to provide care and assistance to their children and parents. Unfortunately, 68 percent of married women need to find financial resources to offer practical or routine help to their parents, while others still live on with only one income. Sandwiched families’ unpaid or donated time accounts for more than 33 percent of the overall cost of long-term elder care. They also contribute significant out-of-pocket funds, despite earning less than families without caregiving responsibilities.
These women should consider benefits that pay cash directly to be used for costs not associated with medical treatment, like daycare for children and transportation for parents. Short-term disability or life insurance plans are benefits solutions that help with mortgages, travel and lodging. Having a safety net to rely on during an unexpected medical emergency can prevent workers from dipping into their much-needed savings accounts or racking up high credit card bills for these expenses.
Similarly, mothers of young children and teens should anticipate how they would pay for out-of-pocket costs related to illnesses or injuries, such as broken bones from sports. They should look into accident insurance coverage. It’s an essential complement to core benefits, as accidents can be costly, often resulting in thousands of dollars spent on treatment. According to the National Safety Council, there is a medically consulted injury every second. In 2009, 38.9 million people — about one out of every eight — sought medical attention for an injury.3 Costs can include the following4:
- On-site work injuries each cost an average of $48,000.
- Public injuries cost an average of $8,800.
- Home injuries cost an average of $7,900.
On the flip side, empty-nesters looking forward to starting the next phase of their lives need to protect the nest egg they have spent much of their lives building. The right benefits could help reduce potential risk to those savings due to an unexpected hospital stay or accident.
Women’s health insurance needs are significant and will only increase as they get older. Brokers and agents can continue to reference their preferred list of questions in their initial conversations with women. But they should also broaden the discussion to include women in the sandwich generation, which will keep expanding as life spans increase and women continue to outlive men.
Furthermore, the number of single boomers is growing, and they’ll need more financial protection as they approach retirement. Capped by the fact that a woman is paid about 17 percent less than a man for the same job, agents and brokers need to be protective of their female clients’ health and finances.
- 2012 Aflac WorkForces Report, a study conducted by Research Now on behalf of Aflac, Jan. 24–Feb. 23, 2012.
- Hospital Statistics, 2010 Edition, Health Forum LLC.
- Injury Facts, 2011 Edition, National Safety Council.
- Estimating the Costs of Unintentional Injuries, National Safety Council, 2010.