Back to guides

Why more women are investing in income protection – and you should, too

Clock Icon

3 min read

Everyone knows they need to insure their car, their home and anything precious, from pets to bicycles. But the pandemic has sparked increased interest among women in another kind of insurance – policies that ensure individuals and their families can meet their financial commitments if the worst happens, called income protection.

Horizontal Rule
Mortgage IQ Team
Mortgage IQ team

Last updated: 25 January 2022

At a glance:

  • The term ‘protection’ means insurance policies that help people and their families meet their financial commitments if they face long-term sickness or unemployment, or if they die. Policies include critical illness cover, life insurance, income protection and mortgage protection.
  • The numbers of women taking out life insurance rose during 2019 as the pandemic worsened, reflecting the growing desire for financial security in times of economic crisis.1
  • Ask a financial adviser to help you choose the best policy for your circumstances.

What if I already have savings?

The pandemic has made people realise that their income is vital and has revealed the value of protection insurance. Although many people have already prepared a will and have savings or other assets earmarked for their family should the worst happen, often cash savings will not cover the full cost of long-term illness.

Meanwhile, having to sell investments such as shares or property in a rush to meet unforeseen outgoings is both stressful and risky, as it can mean accepting less for your assets than you hoped for. It’s also a problem for when you have recovered, as those diminished savings and assets have to be replaced but at potentially higher prices than you initially paid for them. Executing a will can also be a lengthy process, which may leave family unsupported financially for months or years.

What should women consider with protection?

When buying insurance, most people think about the cash value of their possessions – how much it would cost to replace their car or smartphone, for example. But when buying income protection, women need to think about the value of the unpaid work they do alongside their salary, including household chores. If you have young children, you also need to think about childcare. If you were ill for an extended period of time, how much would childcare cost? You would need to factor in future expenses, too; for example, the extra-curricular activities that children will be involved in once they reach secondary school.

Income protection is especially important for part-time workers (the majority of whom are women) and the self-employed, as during periods of economic crisis, these jobs are often lost. Sometimes, the main earner in a household has an income protection policy, but the partner on a lower salary or working part time should also be covered.

There is a wide range of protection policies available to cater for every kind of personal circumstance. Before opting for one, it’s important to speak to a financial adviser to assess your financial liabilities and ensure you have the right insurance for your needs.

If you are looking for income protection, we can help you choose the best policy for your circumstances – please get in touch.

Sources:

1 A more inclusive protection market, iPipeline Quarterly, iPipeline UK, November 2019

2 OECD Policy Responses to Coronavirus (COVID-19): Women at the core of the fight against COVID-19, Organisation for Economic Co-operation and Development, 1 April 2020

3 How has the coronavirus pandemic affected women in work?, House of Commons Library, 8 March 2021

 

Contact us

Our team are here to answer your questions, explore your options and help you find the solution to your mortgage and protection needs..

Compare mortgage quotes

Have an initial look at some mortgage options, you can discuss these with one of our expert advisers who have top industry knowledge to help you navigate the mortgage minefield.

Compare

Mortgage Calculator

Use our simple mortgage calculator to see how much you could potentially borrow. Remember this is indicative only, speak to an expert adviser for a full calculation, specific to you.

Learn more

Stamp Duty Calculator

It is important to consider other costs. Stamp Duty is a tax you might have to pay if you buy a residential property or a piece of land in England and Northern Ireland. Use our calculator to find out how much this may cost.

Learn more
IQ & Co

Invested in you.

IQ&Co provide a wide range of services whether you are looking to build, grow, protect or preserve your wealth.