Johnny Timpson's Blog

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Mother’s Day. Cards, flowers and a “what if” review

Whilst we mark Mother’s Day on March 31, as far as children are concerned, and dependent children in particular, every day is “mum, can you do this for me” day! This makes new data from the Office of National Statistics (ONS) released on Feb 22 very sobering reading.

This informs us that around 7,000 children born each year in England and Wales are likely to face the death of their mother before they reach 16. You can read the full ONS press release here.

No one can identify the children who are likely to face this challenge during their childhood, so encouraging mothers and all parents to undertake a “what if” financial resilience and protection review to put things in place in case they die before their children grow up, is very important. To support this need further, Scottish Widows research has shown that while 21% of women are the primary bread winner in their family, 65% of these have no financial protection in place. The significant reforms made to working age welfare bereavement benefits also highlights how important having this conversation is.

To aid, inform and position your review discussion, I’ve identified some interesting findings from our research.

When women are asked why they haven’t taken out Life Cover:

  • 23% say they don’t have dependants so don’t need the cover
  • 19% say it’s not a financial priority at the moment. Interestingly only 13% of men give this reason, which makes me think perhaps women don’t recognise the value they bring into the home as much as men. This is certainly worth exploring in discussions with your clients.
  • 16% say they don’t think they need a policy like this.

When women are asked why they haven’t taken out Critical Illness Cover:

12% say they don’t trust insurance companies to pay out (v’s 8% of men). This demonstrates that the industry needs to pay more attention to building this trust with females in particular.

19% say they don’t think they need a policy like this. This is a significant percentage and while we know for some, critical illness cover may not be appropriate, in many cases it may be more of a lack of understanding of the costs that may be incurred by a diagnosis, and the benefits having cover can bring.

Protection in the workplace

Our research shows that 17% of women Vs 26% of men receive an equivalent of financial protection in the workplace. While we know occupational cover shouldn’t always be relied on in isolation, it’s still a very valuable benefit and some cover is always better than none. It’s another key piece of insight that highlights how women are under-protected, and valuable to bear in mind in your discussions.

A realistic approach?

Some of the statistics I came across lead me to believe that women are perhaps more realistic in their approach to coping should they be hit with financial challenges due to a serious illness.

For example:

  • 32% of women Vs 43% of men say their household would be financially secure for the long term (over 6 months) if it lost its main income as a result of long term illness or incapacity. Could this be because women are more aware of the costs associated with running a household, so have a better idea of how long they could cope without the main income?
  • When asked what they’d do to ensure they/their family could manage financially if they/their partner couldn’t work for 6 months:
    • 28% women V 22% males would make significant cut backs;
    • 11% women V 9% of men would sell property to free up capital and
    • 5% women Vs 10% men would rely on family and friends
    Interestingly, women look to cut back and make practical changes whereas men are more open to relying on others. Again, following a more realistic approach.

Placing value on being self - employed

Self-employed women have a considerably higher uptake of protection than self-employed men. 10% of women said they had a protection policy to claim on when asked if they had a contingency plan should they be unable to work due to illness Vs just 2% of men. Is it the case that women place a higher value on themselves as they’re self-employed than they do working in a different type of role or in the home?

Your Mother’s Day discussions & the importance of collaboration

Our research calls out some real differences in the take up of protection between women and men and importantly, differences in coping strategies. Understanding these can add real value to your conversations.

As part of your review of mums and parents financial protection and resilience needs, consider not just discussing appropriate protection cover requirements, but also the use of trusts, making a Will ( remember March is Free Will Month), and ensuring that occupational death in service benefit nomination forms are up to date. And don’t forget the choosing, appointing and briefing of guardians and trustees.

If family protection provision is not your core business, there is real merit in working in collaboration with a whole of market protection specialist intermediary. While these discussions and actions can never take away the pain of a parent and partner dying, they can make life that bit easier for your clients’ family. And of course, once planning is complete and cover is in place, your clients families can get on with the important business of enjoying life together.

Note: Whilst the ONS data referenced is focused on the loss of a mother, the ONS estimate that the number of children who could lose a father by the age of 16 may be around twice as high as the number losing a mother.

Sources: Office for National Statistics and Scottish Widows Protection Research 2018

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