When it comes to life insurance, women are still dangerously underinsured. Modern women have established themselves as indispensable breadwinners, and whether or not they’re paid, they’re often caregivers, too. Families depend on women, so life insurance plans for women are critical – but many women aren’t securing the coverage they need.
Life Insurance: Women Need Coverage
Women are less likely to have life insurance than men. LIMRA says that 58% of men owned a life insurance policy in 2021, but only 47% of women did.
This doesn’t mean women have less need for coverage. It just means they’re underinsured.
In fact, there are many reasons why women need life insurance:
- Women need life insurance because their families depend on their income. The Council on Contemporary Families says that 70% of U.S. mothers will be the primary financial provider for their household for at least one year before their children turn 18. In many households, a woman is the sole earner. In other households, a woman may not be the only source of income, but she still makes a significant financial contribution.
- Women need life insurance because they provide valuable unpaid labor. Life insurance is also important for women who don’t work. Many women are unpaid caregivers, and even though they don’t receive a paycheck, their work still has value. If they were to die unexpectedly, their unpaid labor would disappear, and the family might need to start paying for care. According to Care.com, the average cost of a nanny for one child was $694 per week in 2021. That’s $36,088 a year. Life insurance can help with these and other costs that follow the death of a caregiver.
- Life insurance for women over 50 is also important. Women in this age group are often still working and supporting family members financially. They may also be providing unpaid care to an aging parent. Caregiving.com says the majority of family caregivers are women, and 62% of women provide more than 20 hours of unpaid care a week, compared to only 38% of men who do so.
Understanding and Overcoming the Barriers to Coverage
Women need life insurance, so why aren’t they buying it?
The problem might be a lack of knowledge and confidence regarding life insurance policies for women. According to LIMRA, only 22% of women say they feel very knowledgeable about life insurance, while 39% of men say they feel very knowledgeable. Additionally, around 80% of women overestimate the cost of life insurance.
This is bad news, but the good news is that it can be easy to fix. Women have access to many different types of life insurance policies, and some of them are much more affordable than people tend to assume.
Selecting the Best Life Insurance for Women
Although many women have the general need for life insurance in common, their specific coverage needs will vary. When selecting a policy, you need to ask three critical questions:
- Do you need permanent or term life insurance for women? Term life insurance has a set coverage period. For example, if the term is 20 years, then the policy lasts for 20 years as long as the premiums are paid. Permanent life insurance includes whole life insurance and universal life insurance, and these policies can last the policyholder’s entire lifetime as long as the premiums are paid. Term life insurance is more affordable, but permanent life insurance accrues a cash value and can be part of an investment strategy.
- How much coverage do you need? When determining the life insurance benefit amount, many people focus on replacing the policyholder’s salary. For example, if you want to replace your salary for 10 years, you can multiply your annual salary by 10 to figure out how much life insurance you need. This can work for some people, but because so many women are unpaid caregivers, this method may not be sufficient. Don’t forget to include the value of unpaid labor in your calculations.
- Do you need more than one life insurance policy? You can buy more than one policy, and it often makes sense to do so. For example, you might have a life insurance policy through work. It offers some coverage, but maybe not enough, and the benefits aren’t portable, so you buy a second policy. Alternatively, you might decide to buy a second policy because you decide you need more coverage, for example, when you buy a house or have a baby.
It’s time to close the gender gap by helping women secure the life insurance they need. Contact a professional at PTT Financial to learn more about life insurance plans for women.
