Why Do Females Have To Pay More For Income Protection Insurance?

Generally speaking, income protection insurance is sold to the main breadwinner and more often than not, that has been the husband, however these days, single parent families means that women are often the main source to the household.

Most Australian life insurance companies do charge females higher income protection premiums than males, even if risk factors such as age and occupation are the same.

On average men still earn more than women, but the gap is closing rapidly, and many women now out-earn their husbands.

Reasons why women pay more for Income Protection

One of the reasons why insurance companies charge females more for income protection is because women are more likely to claim than men, and once on claim are more likely to remain off work for a longer period of time.

Women are also more likely to retire early, and often they are the ones who have to take time off to look after children or elderly relatives.

By spending less time in the workforce means fewer savings, less Superannuation, and less of an ability to recover from financial setbacks.

And since women normally live longer than men, these setbacks can be even more financially damaging over time.

What types of insurance should women have?

  • Income Protection covers up to 75% of your income if you can't work temporarily due to sickness or injury - making it very valuable for working women.
  • To protect you against diseases like cancer, there is Trauma Insurance. It pays a lump sum on diagnosis of an illness - helping to replace your income, and can assist in covering the costs associated with treatment.
  • Life Insurance and/or Total and Permanent Disability (TPD) Insurance can provide a lump sum to you or your beneficiaries if you were to die or are seriously disabled. This can be especially beneficial if you have a family and/or a mortgage.
  • If you are self employed or run a business, you can cover your fixed business expenses in the event you are unable to work temporarily due to sickness or injury. This could also include the cost of finding a replacement should you need one.

Strategies to make insurance more affordable:

Talk to a financial adviser before you take out insurance, as there are numerous ways you can reduce the cost of your premiums.

Income protection and business expenses insurance premiums are often tax - deductible.

Find income protection cover you need.

The best way to find income protection insurance cover that suits your needs, is to speak to one of our advisers, who will help you to chose the right cover as cost effective as possible. Please fill out the form on this page.

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Published on March 3-nd, 2010 in Insurance
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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