9 Reasons Why Life Insurance for Women is a Critical Financial Tool
Many people are aware of the gender wage gap, but fewer are aware of the disparity in life insurance coverage between men and women. According to a 2021 study by Life Happens and LIMRA, only 48% of women own life insurance, compared to 58% of men. This article explores the reasons why life insurance is particularly important for women, from covering final expenses to ensuring long-term financial planning.
In a 2022 study, LIMRA found that women who don’t own life insurance often cite “covering final expenses” as their primary reason to get a policy. However, life insurance provides financial security that extends far beyond funeral costs.
Here are nine reasons why life insurance for women is an important consideration:
1. Covering Final Expenses
While not the sole purpose, covering final expenses is a crucial aspect of life insurance. The National Funeral Directors Association reported in 2021 that the average cost of a funeral with viewing and burial in the United States was $7,848. The average cost of a cremation was also substantial, at $6,971. A life insurance policy eases the financial burden on loved ones during a difficult time.
2. Replacing Lost Income
Data from a 2022 LIMRA study found that women who do own life insurance most often list replacing lost income as their primary reason. Women make up over half of the U.S. workforce, and many families depend on dual incomes. The loss of one income stream can create significant financial strain. Further, about 70% of American mothers will serve as their family’s primary breadwinner for at least a year. Women spend, on average, almost six years as the primary earner. Life insurance is key to smart long-term financial planning for your family’s future.
3. Paying Off Debts
Consider what would happen to your family’s finances if you unexpectedly passed away. Even if you’re single or don’t have children, life insurance can alleviate the financial burden of outstanding debts, such as car loans, home mortgages, student loans, or medical bills.
4. Covering Household Contributions
It’s challenging to put a price on the loss of a loved one. While replacing lost income is vital, the value of a stay-at-home parent’s contributions must also be considered. Data from Salary.com indicates that the value of a stay-at-home mother’s job is $184,820. These contributions can include household cleaning, cooking, childcare, and more. The loss of a parent who provides these “services” would need to be covered, either by a spouse or outside help.
5. Paying for College
For women with children, especially with the high and rising costs of secondary education today, college costs are an important consideration. Here are average tuition and fees for the 2022-2023 school year, reported by U.S. News:
- Private Colleges: $39,723
- Out-of-State Students (public colleges): $22,953
- In-State Students (public colleges): $10,423
Life insurance can ease this cost, ensuring that your child can continue their education with minimal financial stress after a parent’s death.
6. Living Benefits for Chronic Illness
If you know someone suffering from a long-term illness, you understand how difficult it can be. Several long-term illnesses affect women more often than men. For example, 90% of people with lupus are women, and 80-90% of chronic pain diagnoses like fibromyalgia are given to women. Some life insurance policies offer riders that can help cover the costs of chronic illness care.
7. Life Insurance for Women is Affordable
This article highlights that policies from WAEPA are affordable, and available to current and former Civilian Federal Employees. Because WAEPA rates are calculated for the group rather than individuals, members often save money on premiums compared to other life insurance policies. For example, members who switch to WAEPA from FEGLI save an average of $300 per year. For example, a 40-year-old woman would pay $88.20 quarterly, $29.40 monthly, or $13.57 bi-weekly for $500,000 in coverage.
8. Protecting Your Business
According to the National Association of Women Business Owners, there are 12.3 million women-owned businesses in the U.S. For business owners, life insurance can provide protection for the family, company, business partners, and employees if the owner passes away. Your policy could be used to pay off debts or keep the business afloat if needed. With a family business, a life insurance policy can ensure that everyone gets an equal inheritance.
9. Peace of Mind
Life insurance for women is a critical financial planning strategy whether single, a breadwinner, or a stay-at-home mom. With coverage, you can be confident that your family’s financial future is secure.
