There is a tendency to place values on all kinds of things, from property to cars, from jewellery to smart phones. When it comes to protecting against the loss of these things, it’s then a straightforward calculation. However, when it comes to valuing people and protecting against potential loss, there seems to be a large imbalance in how men and women are valued.
In a series of recent interactive group talks, I set a task for the participants (who, as it happened, were about 75% women). I gave them a typical family scenario of a couple, John & Mary, with 2 children aged 2 and 4, with John in full time employment and Mary being a stay at home mum, not in paid employment. There were various other details but the task was to agree how much personal life cover they should both have (outside of their mortgage protection). Out of 9 different groups, all but one decided on Mary needing far less cover than John (on average, about 50% less). I then explained how to calculate the financial loss that would be suffered in the event of either of their deaths. Even though John had the only income, if Mary passed away, John would have to either give up work to care for the two young children or else pay for all of the minding that would be required, as well as possibly other tasks that Mary may have looked after. In short, in this example (with children that young) the same level of life cover would be appropriate for both of them, as the financial loss that would be suffered in the event of either fatality would be very similar. Once a detailed explanation of how we arrived at these calculations was given, everybody completely agreed that this was the case but it certainly illustrated how in general, there was an under valuing of Mary’s role and therefore an under valuing of the financial loss that would be suffered. This is also evident both in the levels of cover that we see that people have and also in the claim statistics that are published by the life companies each year. The number of life claims for women is far less that those of men (even allowing for the naturally higher proportion of males dying younger) and the amounts of the claims is also much lower for women on average. The same is the case for serious illness claims, far less and far lower for females.
With many campaigns and much publicity around the imbalance of wages and opportunities between genders, it is worth considering how we value ourselves and how we also value the potential loss of ourselves. Take a few minutes and look at your own situation to see if you’ve done anything similar.
Dave Kavanagh QFA has been a Financial Advisor for over 20 years (and a Gym Instructor/Nutrition Advisor before that!) He has done advice slots on on RTE 2FM and on TV3 and does the “Ask the Expert” Financial Advice section on Mumstown.ie For more information on this topic, just send an email and remember, with Financial Companion, there is no cost and no obligation to arrange a review. Contact us to find out how simple it is.