Women hold 47% of life policies, but the value of their cover is much lower than that of men, and few women have sufficient income protection, according to Discovery Life’s analysis of its 2021 claims data.
A 2019 insurance gap study by conducted by True South Actuaries and Consultants found that women have a total insurance gap (life and disability insurance) of nearly R15 trillion.
Typically, a female earner needs death cover of about R1.5 million but has cover of only R522 058, leaving an insurance gap of R989 154. And, while a female earner would typically need disability cover of about R2.2m, the actual cover is about R998 667, leaving an insurance gap of R1.2m, the study found.
“According to Statistics South Africa, 38% of South African households are singlehandedly headed by women, so it is clear that South African women need to protect themselves with the correct financial products,” said Kashmeera Kanji, Discovery Life’s head of market analytics and research and development.
“Whether women have a role as a homemaker or an active earner in a household, they contribute directly to the financial well-being of their dependants, and a life-changing event affecting them could cause significant strain on the household finances,” she said.
In 2021, Discovery Life paid 3 523 claims to its female clients for life-changing events, including R628m worth of cancer claims. Cancer accounted for 20% of all death claims, 27% of all disability claims and 50% of all severe illness claims for women.
South African women face unique risks that compound the financial impact of a life-changing health event. The World Economic Forum found that South African women face higher unemployment rates than men despite there being more female than male graduates.
Women are more likely to commit to non-income generating tasks in a household, which means they spend less time in the workforce.
South African women, on average, also live nearly six years longer than South African men, which means they are likely to spend six more years in retirement.
“Collectively, this underlines the importance of women protecting their ability to earn an income, because it creates the resilience needed to tide these gaps,” Kanji said.
Kanji encourages women to consider protecting their financial wellbeing through various financial products, particularly life insurance that includes income protection.
“While women accounted for nearly half of the number of income claims in 2021, these claims made up only 31% of the rand amount paid.” This was likely a result of the gender wage gap, which might also be affecting the levels of cover on other benefits.
Although 47% of all policies at Discovery Life are owned by women, the value of their cover is much lower than that of men. In 2021, 30% of all life cover claims were for women, yet these accounted for only 19% of the total amount paid to beneficiaries.
