The latest Stats SA General Household report revealed 41,8% of the households in South Africa were headed by women. Approximately 7.2 million South African women are either the sole or the main income earners in their families. As the country celebrates Women’s Day on 9 August 2021, Emda Fourie, Head of Employee Benefits Consulting at Momentum Corporate Advice and Administration, takes a closer look at the importance of adequate insurance benefits for women.
Much like the rest of the world, the typical South African family structure has changed over the years. The prevalence of single-parent families is on the rise and increasingly more households are headed by women. The combined effect of these two structural shifts has been a growing number of single working mothers in the South African workforce.
Given that the head of the household is usually the main breadwinner, Fourie says, “The reality today is that many single working mothers in South Africa are the sole caregivers and providers for their families. Income certainty for them therefore has a far wider-reaching impact, as it also determines the future of their families”.
As a result of the pandemic, women are more financially exposed than ever. The latest Momentum | UNISA Household Financial Wellness Insights says that women, who make up 51.1% of the South African population, were hardest hit by the lockdown. Just over a million either lost their jobs or were prevented from working.
South African employers providing benefits to their employees need to recognise the financial vulnerability that their employees, who are also single mothers, are exposed to.
Given this vulnerability, Fourie highlights the need for these female breadwinners to protect their most valuable asset – their ability to earn an income. Protecting their ability to earn an income helps to safeguard the future of their families if they are unable to work due to disability or a critical illness. An unexpected and life-changing disability or illness can have a considerable impact on an employee and their family. They could be left without an income if they are unable to work or forced to move to a less strenuous, lower-paying job.
According to StatsSA, deaths in South Africa rose by 34% in 2021. This increase is driven largely by Covid-19. Fourie says Momentum Corporate’s death benefit claims also reflect a significant increase.
“Since July 2020, our death claims increased by 53% year on year, and a third of these claims were for women. We paid a total of R3.8 billion of death benefits claims in the year ending 30 June 2021, which was R1.9 billion higher than pre-Covid claims. R900 million of the claims paid were for women, which was 77% higher than the previous year. This highlights why it’s so important for South African women, particularly those who head households, to have the right level of life cover in place to protect their loved-ones from potential financial catastrophe in the event of their death.
Employers need a holistic approach to their group insurance benefits which includes disability, critical illness and death cover at the right level for all employees, but particularly for single mothers who have no one else to rely on financially if the unfortunate happens. This will also ensure that they can afford to get the care that they need to get back to work, without having to rely on already stretched incomes,” says Fourie.
Women are encouraged to engage with their retirement fund’s member benefit counselling services in order to fully understand the benefits they receive through their employer. If they find that their employee benefits do not include an income disability benefit, critical illness benefits or life cover, they could motivate to their employer that these benefits be provided. If this is not possible, they should talk to a financial adviser who can advise them on making personal provision for this type of insurance cover.
Fourie concludes, “Most people plan their future based on the assumption that they will continue to earn an income until they retire, but few take into account the risk of not being able to do this due to a critical illness, disability or premature death. Holistic group insurance benefits keep female employees on their journey to success and protects their family’s financial security.”