According to recent statistics, women are less likely to have life insurance. In fact, only 56% of women have life insurance compared to 62% of men. This insurance gender gap exposes women and their families to a significant financial risk.
If you're a woman who's thinking about buying life insurance, know that you're making a wise decision for yourself and your loved ones. In this guide, we'll discuss why more women should get life insurance and what the process is.
Facts About Life Insurance For Women
It's no secret that women have become major financial contributors to their respective households. According to the US Bureau of Labor Statistics, about 55.4% of women ages 16 and up were part of the labor force in 2020.
If these women were to pass away unexpectedly, their loved ones would need to find a way to survive without their income. Family members would also have to spend more time preparing meals, doing the laundry, and cleaning since many women also take on this responsibility.
However, when it comes to life insurance coverage, women continue to lag behind men. On average, men have $206,357 worth of individual life insurance while women only have $160,782.
Affordable life insurance coverage options for women can help close this gap. Thankfully, life insurance premiums tend to be cheaper for women compared to men. The reason behind that is that women tend to have a longer life expectancy, therefore exposing insurance companies to less risk.
Benefits Of Life Insurance
Getting a life insurance policy offers plenty of benefits. Here are some of the most important advantages of getting insured.
Provide Financial Security For Your Family Members
The primary reason for getting life insurance coverage is to provide your family with a financial safety net after you pass away. By getting a life insurance policy, you can have a way to replace your income and continue to support your family.
Supplement Your Retirement Income
Since women tend to live longer than men, they also have to prepare for a longer retirement.
Most types of permanent life insurance, such as whole life insurance, have a cash value that earns interest. In addition, some types of permanent life insurance policies earn dividends. You can use money from your life insurance as supplemental retirement income, allowing you to pay for adult day-care, long-term care, and more.
If you're unsure of how to increase the cash value of your account, consult your financial advisor. They’ll be happy to provide financial planning and investment advice.
Build A Legacy
Some types of permanent life insurance allow you to increase the death benefit. For example, in the case of variable life insurance, you can increase the benefit based on the performance of the investment accounts linked to the policy. These investment accounts can come in the form of stocks, bonds, money market funds, and equity funds.
This unique feature is a good way to build a legacy. If your investments perform well, you can increase the death benefit and leave a significant amount of money to your children.
Who Needs Life Insurance?
To close the life insurance gender gap, more women have to buy life insurance. But at which stage of life do women actually need life insurance coverage?
In this section, we'll discuss why women of all ages should consider buying life insurance.
Young And Single Women
It's easy to dismiss your life insurance needs if you don't have children or other dependents who can benefit from the policy payout. However, getting a life policy when you're young and single offers plenty of advantages.
Your family can use the death benefit from your policy to pay off your debts and cover your funeral expenses. Getting a whole life plan that builds cash value is also a good way to begin investing and diversifying your portfolio.
Working women earn a significant portion of household income. In fact, a quarter of wives are breadwinners in their families – a huge difference compared to 6% in 1960.
If these working women were to pass away unexpectedly, that would cause significant financial hardship for their families. Getting a life insurance policy would allow these women to provide their families with a financial safety net.
According to the US Census Bureau, 1.1 million employer firms are owned by women. If you’re a female business owner, then it would be a good idea to get life insurance and list your business as a beneficiary.
If you pass away within the coverage period, your employees can use the payout to cover operating costs while the business is searching for a new owner/manager. The funds can also help your employees gain leverage when structuring buy/sell arrangements.
Even though stay-at-home moms don’t bring home actual paychecks, it will still be a financial burden to their families if they died. They're often responsible for caring for children, running the household, managing money, and more. If you were to add up the labor costs for all of these responsibilities, the median salary for a stay-at-home mom should be about $178,201 per year.
So, if a stay-at-home mom were to pass away unexpectedly, the surviving spouse would have to spend more money on maintaining the household. Childcare alone can reach up to $10,000 per year.
Include the cost of hiring a professional to do house cleaning, cooking, and other chores, and you're looking at thousands of dollars worth of expenses just to replace the work done by a stay-at-home mother.
To make sure that your family can afford all of these if you were to pass away unexpectedly, you need life insurance coverage. Your spouse can use proceeds from the policy to pay for childcare and other household costs until your children become financially independent.
Women typically aren't only primarily responsible for childcare, they're also responsible for caring for aging members of the family. If you pass away uninsured, then your family might find it financially straining to hire caregivers or pay for a nursing home.
Factors That Affect Life Insurance For Women
If you’re a woman, your life insurance rates will be based on more than just your age, current state of health, occupation, and hobbies. Life insurance companies also tend to look at the following gender-specific factors.
Mental Health And Hormonal Disorders
Women are more prone to side effects from hormonal issues, such as weight gain, depression, and anxiety. All of these may drive up the cost of insurance.
Getting pregnant can be riskier for some women compared to others. A life insurance company will look at your past pregnancies to determine your risk for weight gain, postpartum depression, and other pregnancy-related complications.
Pregnancy also plays a part in whether you'll get your life insurance application approved. Women who are in their first trimester generally won't have problems getting coverage. However, those who are in the later stages of pregnancy will have to wait until they give birth before they can purchase insurance.
Breast Cancer History
A life insurance company will look at your family's breast cancer history, as well as your personal medical history when determining your insurance premiums. Don't be surprised if a life insurance company asks to see the results of a BRCA test to see if you have the breast cancer gene.
If you’re at a higher risk of developing breast cancer, your premiums may be more expensive. Additionally, women who are undergoing cancer treatment will likely be unable to apply for traditional life insurance coverage.
How To Get Life Insurance
Getting life insurance doesn't have to be a complicated process. Here is a step-by-step guide to getting the coverage you need.
1. Find An Agent
The first step is looking for an independent agent. They can help you compare life insurance policies and get quotes. Additionally, they can provide guidance regarding the application process.
2. Pick A Policy
Once you've found an agent, you can ask for their advice as to which policy best suits your needs.
Term life insurance is cheaper but provides coverage only for a specific period, usually from 1 to 30 years. Meanwhile, permanent insurance provides coverage for your entire life but costs more.
For a healthy 35-year-old, a 30-year term life insurance policy with a face value of $250,000 can cost $23.68 per month. By comparison, a whole life insurance policy can cost more than five times this amount.
3. Decide On the Coverage Amount
Most experts would agree that you need to multiply your annual income by 10 in order to determine how much coverage you'll need. This would help your family cover their living expenses, child care costs, education, and more for a decade after you pass away.
You should also add up the remaining balance from your debts. This includes student loans, credit cards, and any other liability that would be a financial burden to your family.
4. Apply For A Whole Or Term Life Insurance Policy
Once you're decided on which policy you want, it's time to start the application process. This typically involves submitting your personal information to the insurer and answering several questions regarding your health, occupation, and hobbies. Make sure to disclose all the necessary information, as withholding important details may prevent loved ones from claiming benefits in the future.
In some cases, you may even be required to take a medical exam. This involves a comprehensive physical checkup as well as submitting blood and urine samples.
5. Pay Your First Premium
Once your application is approved, you'll need to pay your first premium. Most policies aren't active until you've paid, so complete the payment process as soon as possible to get coverage.
Getting insured is just as important for women as it is for men. Whether you're a stay-at-home parent or a single lady, getting a policy is a great way to provide your loved ones with adequate financial protection in the event of your death.
If you need more information about life policies, get in touch with Wesley Insurance, LLC. We're here to answer your questions and provide advice on getting the coverage you need.