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Rethinking the Role of Life Insurance for Women [Top 7 Benefits]

Fact Checked by Jason Herring & Barry Brooksby
Licensed Agents & Life Insurance Experts.
Insurance and Estates, a strategic life insurance provider composed of life insurance professionals, is committed to integrity in our editorial standards and transparency in how we receive compensation from our insurance partners.
best life insurance policy for women

The following article is specifically about life insurance for women. According to LIMRA, life insurance ownership for women is at 56%, about 10% below the ownership for men.

Further, total death benefit coverage falls short with women as well, as life insurance policies for women have 22% lower death benefits than men.

To put this in perspective we need to consider the evolving role of the woman in our culture.

According to Pew Research, 60% of homes with kids under 18 are financially supported by both spouses.

In contrast, back in 1960, that number was only 25%. More and more families need both mom and dad to have life insurance coverage to protect the family’s income.

What All Women Need to Know About Life Insurance

At I&E, we have some different perspectives on the role of life insurance for women. Please browse our site for more but we would introduce you to a few of our unique articles, such as the Best Life Insurance Companies and Whole Life vs Term Life Insurance.

I know life insurance is not the most exciting thing to think about but let’s be real here, we are all going to die someday.  Tragically some earlier than others.  Think about how your family would handle it if you died today.

I wonder if my husband would remember to cut our son’s toenails or remind him to brush his teeth.

My single mom friends wouldn’t have someone there to tell their child, so what is their plan?

Aside from day to day things, how will your family pay for your final burial expenses, funeral, outstanding debt or bills, and continue to pay to survive?

Here are all the things that women should know about life insurance.

Top 7 Benefits of Life Insurance for Women

We will unpack this further below but let’s focus on the benefits life insurance for women can offer. Life insurance benefits the following four types of women and offers three distinct benefits.

Stay-At Home Mom

Let me guess, you are a stay-at-home mom, and you are arguing with me right now correct?  Since you don’t technically bring in any income, why would you need to replace it?

Let’s think about all the jobs you are doing, and your family might have to pay for if you die.

  • Cook
  • Cleaner
  • Childcare
  • Driver
  • Laundry Fairy

If your husband still has to work if you die, a lot of the above jobs that you on a daily basis may need to be hired on and paid for.

Single moms

Wouldn’t you want to provide money for your child, or children, and the people who are raising them? If you have any amount of debt, then your life insurance would pay for it.

Primary breadwinner of the family

You need life insurance so that your family can continue the lifestyle they have become accustomed to.

The last thing you want is for your family to lose you, then lose their home because they can’t pay the bills without you.

Woman business owners or entrepreneurs

Many women are creating vibrant, successful businesses. Don’t neglect having the proper buy-sell agreement funded with life insurance. You may need to also consider long-term disability insurance.

Death Benefit Protection

Probably the most obvious benefit a woman’s life insurance provides is the death benefit, a  lump sum payout that goes to your beneficiaries when you die.

Cash Value Growth

Cash value life insurance provides you with an income stream later in life that can be used for whatever you want. The cash value grows tax deferred and can be accessed tax free via life insurance loans.

Living Benefits

Many policies have an accelerated death benefit that allows you to tap into a portion of your death benefit if you are terminally ill. Further, some insurance policies include a chronic illness rider that allows you to access a portion of your death benefit if you are diagnosed with a chronic illness.

Best Life Insurance Policies for Women

Life insurance for women is not one-size-fits-all. You first have to decide what the best life insurance policy will be.

And consider what very few are talking about, life insurance as a way to create additional income. According to Market Watch, around 80% of women have no pension benefits, they have lower Social Security benefits compared to men, and smaller balances in their employers’ defined-contribution plans.(1)

With that in mind, would you consider the advantages of life insurance as a savings vehicle, which provides you with an additional income stream later in life?

Once you decide on the type of policy, then you have to decide which life insurance company will offer that policy, designed specifically for you-based on your unique needs and goals.

The most popular life insurance policies you may have heard of include term life vs whole life insurance. But there are more to choose from.

Among the different life insurance coverage types available are term, whole life, universal life, indexed universal life and variable life. And with almost 800 life insurance companies, there are a lot of possibilities on policy design and features.

Here is a brief overview to help you decide what life insurance policy may be best for you.

Term Life Insurance

People like term life because the insurance premiums are typically lowest, at least at first. And for women, term life premiums are lower due to a longer life expectancy than men.

As the title states, this policy is in effect on your life for a specific term.  Usually 10, 20, or 30 years. If you die during the term, the life insurance death benefit payout goes to your beneficiary.

A lot of women buying life insurance get a 30-year policy when they buy a house, due to the 30-year mortgage.  This is a great way to cover at least that debt for your family should something happen to you.

And a term life insurance policy is the most affordable, so you don’t have to break the bank to get coverage while you are young. Most life insurance companies fall all over themselves trying to insure a healthy woman in her 30’s for a 30-year term.

However, the downside is that after 30 years the policy expires, and you then you may have to purchase another policy, because after all, your family still could use financial support even if you don’t have a mortgage.

An alternative to buying a new policy, is to make sure you buy convertible term life insurance. With a term policy that is convertible, you can convert all or a portion of your death benefit to permanent coverage, without evidence of insurability (i.e. you don’t have to take an exam or submit to life insurance blood testing).

Whole Life Insurance

Whole life insurancebest whole life insurance policy for women is a more expensive option, at least initially. But the upside is the policy remains in effect for your lifetime.

The good news about that is, you purchase it once, and then you’re done, provided you make the payments, and some limited pay whole life insurance policies allow you to make premium payments for a number of years and then stop.

Once you have fulfilled your obligation of insurance premium payments, your policy is paid-up. You still get the cash value growth and death benefit, but you no longer are required to make premium payments.

Now, not all whole life policies are made the same. In fact, they can vary greatly. Properly designed whole life insurance is a good investment. Whereas, a poorly designed policy is not worth your money or time.

Universal Life Insurance

Universal life is a policy that gives you a more affordable premium, like term insurance, but also has a cash value aspect to it.  In similar fashion to whole life, universal life insurance can vary by plan and by company.

Among the different universal life insurance policies are Guaranteed Universal Life (GUL), Indexed Universal Life (IUL) and Variable Universal Life (VUL). The main benefit of universal life vs whole life is the flexibility. Universal life allows you to adjust your premium payment and death benefit to accommodate your current lifestyle.

Guaranteed Universal Life (GUL)

A guaranteed universal life policy provides affordable death benefit protection, with a guaranteed rate of return. It is generally considered the most affordable permanent coverage. However, you sacrifice cash value accumulation for a lower premium, making it a good choice for estate planning and second to die policies.

Indexed Universal Life (IUL)

An IUL insurance policy provides the opportunity for higher cash value growth. Your premium goes towards different indexed accounts that can provide a return based on the performance of certain indices, such as the S&P 500. An IUL policy has a cap on how much interest can be credited and a floor on how much you can lose, providing some stability.

Variable Universal Life (VUL)

A VUL insurance policy offers the ability to invest directly into the market via sub-accounts, much like mutual funds. You have the potential to earn interest based on the performance of the stock market. You also have the potential to lose your principle based on negative market returns.

Life Insurance Quotes for Women

It may please many of you to know that women typically pay less for their life insurance premiums vs men.

No, it’s not because we are smarter than men.  It is because we statistically live longer, healthier lives. And with a longer life expectancy, the benefit to us women is lower life insurance premiums.

Also, the younger you are, the cheaper your life insurance rates as a woman will be. And depending on the policy option you choose, the greater your ability to build a powerful home-base for your money, for wealth building and legacy creation.

In contrast, life insurance for seniors is going to be more expensive because of a shorter life expectancy.

However, there are many great policy options available for seniors, outside of the typical burial insurance or final expense insurance policy most often advertised.

Here at I&E, we believe those types of policies should be taken out as a last resort.

Long-Term Care Insurance

Now, whereas life insurance is less for women than men, that is not the case with long-term care insurance.

Since women outlive men, the chances of a woman needing long-term care services is greater. That is why we often recommend a hybrid long-term care life insurance policy as an alternative if you are considering this type of coverage and long-term care insurance costs are too much.

Life Insurance Retirement Plan

Ladies, when it comes to life insurance, it can serve many purposes. Most focus on the death benefit it can leave to your family, but what if you don’t die?

Many people create life insurance retirement plans which provide supplemental income in your later years to help make up for any shortfall later in life.

How Much Life Insurance You Need

While it may be overwhelming to think about how much of a death benefit you might need, it is simple.

You want to take your debt (mortgage, student loans, car loans, solar panel loans, etc.) and a multiple of your salary if you have one, or what your salary would be if you are a single mom using the jobs mentioned above and add them together.

My suggestion is to bump that up quite a bit for funeral expenses and any extra bills you may not think about.

You know what else is great about life insurance policies in general?  Most of them give you the option to add a life insurance rider for your children.

For example, I have a 20-year term policy right now that will pay off all my debt and then some.  I also have an extra $25,000 for my children if something, god forbid, happens to any of them.  The child rider was pennies to add to my policy.

Get On It

As a woman, it is easy to say okay, I am buying life insurance.  It’s another actually to do it.

I know it is not a fun thing to think about, but it is better to think about it and prepare than to leave your family devastated.  They will have enough to deal with if they lose you.

Hopefully, you won’t need to use it but better safe than sorry. So quit daydreaming about that vacation and flipping off your boss and call your life insurance agent today.

Next Steps

Don’t have you own life insurance agent? We are here to help. Please give us a call today for a complimentary strategy session.

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