Table of Contents
Key Takeaways
- There is a disparity between men and women when it comes to life insurance ownership, with only 49% of women having life insurance compared to 55% of men.1
- Life insurance is primarily for the benefit of beneficiaries, providing financial support in the event of the policyholder's unexpected death.
- Women should consider life insurance to cover family expenses, support extended family, and preserve businesses as a legacy.
- Different types of life insurance are available, including term life insurance, whole life insurance, and universal life insurance, each with its own benefits and considerations.
- Compare life insurance options based on age, health, family history, and life expectancy to find the right coverage at the best cost.
Life insurance can help provide financial support to your family if you pass away, but not everyone has a policy. There is even a disparity between men and women when it comes to signing up for life insurance. According to LIMRA, only 49% of women have life insurance, compared to 55% of men.1
Although life and needs can differ for men and women, life insurance can be an equally important financial tool for women. If you don't have coverage, or you'd like to know more, here's a look at some considerations around life insurance for women.
Why Life Insurance Matters
One thing to understand about life insurance is that it isn't just for your benefit — it's primarily for your beneficiaries. If you died unexpectedly, the emotional loss would be a lot for your loved ones to bear, and life insurance could help you reduce the financial loss that may come with that.
If you have children, then everyday expenses like food, shelter, transportation and child care would likely continue, even if your family's income changed drastically due to the loss. Life insurance might help to fill this gap by giving your beneficiaries access to money they can use to help cover ongoing expenses or funeral arrangements.
However, life insurance isn't just for women with immediate families. You may want to leave money for extended family members — nieces, nephews, cousins, godchildren — whom you'd like to help financially, or a parent who may need long-term care when you're gone. It's also possible to leave money to an organization if you would prefer.
Why Should Women Consider Life Insurance?
If you are a business owner, you might feel compelled to preserve what you've built. Making your business the beneficiary of a life insurance policy might help employees and partners keep it operational even when you're no longer around to run it. Who knows? Your legacy might even inspire younger women to follow in your shoes.
Also, whether you work inside or outside the home, your contributions to your family may be worth more than you realize. In fact, the average stay-at-home mom performs the equivalent of more than $184,000 of work per year.2 This includes a variety of jobs such as housework, child care and more. While life insurance can never replace everything a woman does for her family, it could provide money that may help while the family adjusts to the loss.
Types of Life Insurance
There are three main types of life insurance from which to choose: term life insurance, whole life insurance and universal life insurance.
Term Life Insurance
Term life insurance helps provide coverage for a specified period, which can range anywhere from five to 30 years or possibly longer. Coverage expires at the end of the term. If you die during the policy term, your beneficiaries will receive a death benefit.
If you plan to make a business your beneficiary, but only while you're playing an active role, you might select a term that expires around the time you retire, for example. You might also consider a term policy if you expect to have different policy needs by the time your children go to college or move out on their own.
Whole Life Insurance
Whole life insurance is a type of permanent life insurance that never expires as long as premiums are paid, which is partly why it can be more expensive. It's worth noting, though, that women tend to outlive men by an average of six years in North America.3 Life expectancy is generally a key factor in reviewing applications or calculating premiums.
Whole life insurance policies also include a cash value component, which allows you to access the money from the policy while you're still alive. It's important to note that loans or withdrawals may generate an income tax liability, may reduce the account value and may cause the policy to lapse.
Universal Life Insurance
Universal life insurance is another type of permanent life insurance. It has the same basic components as whole life insurance, such as cash value, but offers greater flexibility. You can adjust your premium and death benefit based on your needs after the policy is in force. Just keep in mind that increases in coverage are subject to underwriting, and there must be enough cash value in the policy to cover monthly charges if a lower premium is paid than the amount selected at issue or if a premium payment is skipped. Additional premium payments may need to be made to keep the policy in force.
How to Get Life Insurance
The amount you pay for life insurance coverage depends on a number of factors such as your age, health, family history and life expectancy. If you choose to add optional, additional riders to your policy, your premium may also increase.
When you apply for a policy, you will likely need to provide these types of details on an application. Some insurers may also require you to undergo a medical exam. If so, then this information will also be used to help decide whether to approve you for a policy and what your premium will be.
If you're young and healthy, an insurer may view you as less risky to insure and offer life insurance coverage for a lower monthly premium compared to someone who is older, has a history of smoking, or has a preexisting condition like diabetes or high blood pressure.
If you have loved ones who could benefit from a life insurance policy, you may want to do some research to get quotes and understand your coverage options. Women might be less likely to have life insurance than men, but there's no reason that they can't leave a financial legacy for their loved ones.
Sources
- Women and Life Insurance. https://www.limra.com/siteassets/newsroom/liam/2023/0854-2023-facts-about-women-and-life-insurance-infographic_meta.pdf.
- What Is Your Shocking Stay-At-Home Mom Salary In 2024? https://thesavvycouple.com/stay-at-home-mom-salary/.
- Life expectancy gap between men and women in the US widened significantly during the Covid-19 pandemic. https://www.cnn.com/2023/11/13/health/life-expectancy-gender-gap/index.html.
