Financial Planning for Women – 2 things you need to know May 24, 2021

At a glance:

• Financial planning is for everyone but there are more factors to consider for women.
• Statistically, women are known to have higher morbidity than men, though they also outlive men. Standard definitions of critical illness in current insurance policies lack coverage for female health issues.
• Living longer also requires lifelong income, and relying on CPF Life alone may be insufficient.

Financial planning is for everyone.

But financial planning for women is special, as it must address two specific time-tested statistics about women: their higher morbidity and longer longevity. Women are more likely to face health issues than men but they also live longer than men ^[1].

The insurance industry’s cancer coverage currently only applies to the major organs of the human body. Female organs such as the breast and uterus are not deemed major organs and are therefore not covered.

This gives rise to a need for insurance policies that target female-dreaded diseases such as cancer of the breast or womb. Such policies may also cover conditions like osteoporosis and maternity complications, which largely affect women. Free regular check-ups for early disease detection are usually incorporated in these policies.

In recent years, insurers have responded to advances in medical technology that enable early disease detection and treatment by offering early critical illness policies as well as multi-pay policies. These policies provide payouts in the earlier stages of defined critical illnesses. Multi-pay policies go as far as making multiple payouts over a lifetime, subject to terms and conditions.

Early critical illness coverage is typically priced a bit more than conventional critical illness coverage while multi-pay policies charge a much higher premium. Other factors affecting policy pricing include age at the point of entry, the amount of coverage sought as well as tenure of the policies.

Hospitalisation need not always involve dreaded diseases. As we age, health is either at status quo or goes downhill. It almost certainly never goes uphill. A host of chronic diseases like heart disease and diabetes can strike. Basic MediShield Life is comprehensive and affordable, but the question is, do you want to be better covered? If your answer is yes, there is a wide range of integrated medical shield plans with riders for you to choose from. More importantly, your coverage has to be right-sized to long-term affordability and medical expectations. Before switching plans, remember that health underwriting applies.

Living longer means lifelong income needs to match. Thankfully, we have CPF Life in Singapore. This serves as the bedrock of your financial planning by providing a basic layer of income to meet your essential retirement needs. But no one whom we can think of can confidently say they can do without that extra bit of cash, be it for a better lifestyle or the rainy day. For that to happen, additional retirement funds are needed on top of CPF Life payouts.

Women today have a broad range of options to generate long-term recurring income. These include monthly dividend-paying unit trusts, dividend-focused listed securities as well as regular-payout insurance products, all of which can be blended into a tailor-made solution. However, do note that some involve taking on market risks. A balance between risks and returns needs to be struck according to your individual risk profile.

Longer longevity and higher morbidity: these are the two specific considerations in financial planning for women. If you are unsure where to start, turn to your trusted financial adviser today. At PhillipCapital, we not only offer you breadth and depth of services and products to meet your unique needs but our financial advisory representatives are also well-trained and bring with them a wealth of experience to recommend products to you.

References:
^[1] https://www.income.com.sg/blog/do-women-face-more-challenging-health-issues-compa

Contributor:

Isaac Fang Chung Ngee

FATR (CFD/ETF specialist)

CFP, ChFC, CFA

Phillip Securities Pte Ltd

Email address: Isaacfangcn@phillip.com.sg