4 reasons why women need life insurance

While health, auto and homeowners insurance are often top of mind among women, life insurance tends to slip through the cracks. (Photo: Thinkstock)
While health, auto and homeowners insurance are often top of mind among women, life insurance tends to slip through the cracks. (Photo: Thinkstock)

Now more than ever, women are redefining their roles at work and at home. Women have more options than ever, from full-time careers outside the home to careers as full-time homemakers with stops nearly everywhere in between.

But while women are achieving unprecedented work-life balance and financial independence and solvency, there seems to be one glaring rift in all too many financial plans.

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A piece of the puzzle that is more often missing than not is life insurance. While other types of insurance such as health, auto and homeowners are often top of mind, life insurance tends to slip through the cracks. According to LIMRA, that 48 percent of women are without any type of life insurance. While this number has risen about five percent in recent years, it still isn’t high enough.

Here are four key reasons agents and advisors can convey that underscore why, now more than ever, women need life insurance:

1. They’ll gain financial value, regardless of employment or marital status.

Today, many women make more money than their spouse or they’re working as a single parent and are the head of a household. For stay-at-home moms, recent estimates valued their contribution at approximately $120,000 a year (taken from the duties performed in the household on a regular basis such as childcare, cooking and housekeeping, among others).

2. Life Insurance replaces income

Because contributions bring value, that value needs protecting. According to Loretta Worters, vice president with the Insurance Information Institute, if a stay-at-home spouse dies, the family would need someone to handle the household duties. That’s no small task. The cost could be substantial and a life insurance policy would help to cover those expenses.

If one’s income helps to support the individual, their children and/or partner, a life insurance policy will provide financial support for them in the case of that individual’s death. This can help not only cover the cost of the funeral and anything related to it but also with everyday living expenses.

Of course, it’s unpleasant to think about and plan for one’s own death. But it is a responsible way to make sure your family doesn’t have to worry about your passing, on top of having to cope with the loss.

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The type of insurance chosen and the amount your women clients purchase will depend on their goals, needs, budget and family situation. (Photo: Thinkstock)

3. Life insurance protects one’s interests.

If the woman is single and you doesn’t have any children, she still may need life insurance. If she carries a high amount of debt, have a co-signer for a loan. Or, if she takes care of an aging or ill parent or family member, having life insurance will help protect her estate, co-signer and those she cares for.

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If she doesn’t have insurance but does have debt, typically the executor of the estate will sell whatever they can to help pay off those debts when you die. If there’s a co-signer on a loan, however, that person will be responsible for repaying it. If these scenarios do not apply, she can probably put off purchasing a life insurance policy temporarily. But keep in mind, it’s less expensive to purchase a policy when one is younger rather than older.

4. Life insurance is less expensive for women.

Life insurance premiums are priced largely according to the average life expectancy for gender and age. Women pay less than men, primarily because men have a shorter life expectancy than women. In fact, women on average outlive men by about five years.

Women also tend to develop cardiovascular problems like heart attack or stroke later in life than men do. This longer life expectancy results in lower life insurance premiums.

If you’re wondering how much or what type of life insurance is needed, here’s a tip: multiply income by anywhere from three to 15 times to arrive at the amount of life insurance one should consider buying. For example, if your client is a 40-year-old woman making $50,000 per year at your job, she will want to look at buying a policy that’s worth about $750,000.

This is a general rule of thumb and does vary by age so reiterate to the client or prospect that it’s important to speak with a life insurance agent. She can also select a term life policy at a cheaper premium for a specific amount of time. Or can select a permanent plan that will last the rest of her life and provide her with additional financial planning options.

The type of insurance chosen and the amount your women clients purchase will depend on their goals, needs, budget and family situation. For instance, if still young and single, life insurance needs will be much different than if the client is a bit older, married and/or raising a family.

The bottom line? Life insurance is a key part of a one’s financial success and security so it’s in everyone’s best interest to ensure women don’t overlook this critical consideration.

Brian Greenberg is a multi-faceted entrepreneur currently serving as a founder and executive of multiple online businesses. Read his full bio here.

 

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