Why women need disability insurance

By Steve Savant

The American workforce is changing and so is the paycheck protection opportunity. According to an article last year in the Huffington Post, a Prudential Financial study of more than 1,400 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 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 4 in 10 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 versus 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.