Women need life insurance just as much as men need life insurance. Unfortunately, women are not insured at as high of rates as men. More women are breadwinners of their families than ever. Even those who do not work often provide valuable childcare or other domestic services. If a woman who provides childcare, for instance, were to pass away, the cost of the equivalent daycare will need to be paid for the remaining family members somehow. This is where life insurance can be very valuable by providing protection against these added costs.
Life Ant is here to offer life insurance to women. Women (and men) can compare quotes with our life insurance quoting tool above. We believe in helping all our clients get the best rates possible. We help you find the lowest cost insurance by comparing quotes from many different providers.
Read on to learn why women need life insurance, how they can get the best rates on their insurance, and why more and more financial planners are recommending life insurance for women as often as they do for men.
Why Women Need Life Insurance
Any income-earning member of a family needs life insurance, as long as the family depends at least in part upon that member’s income to maintain their current lifestyle. More and more women are not only income-earning members (the percentage of dual-income families has never been higher) but are also the highest income-earning members of their families.
Women Need Life Insurance If They Work
Traditionally, financial planners have mostly considered men to be the target demographic of their services. This has lead to men owning life insurance at much greater rates than women. This imbalance is unhealthy and leaves family members at great financial risk if something were to happen to anyone un-insured in the family.
Women who work, and especially women who are breadwinners, have families who depend upon the income that they earn. If a woman is not insured, she puts her whole family’s financial security in jeopardy. If something unfortunate were to happen to a working woman and she dies (this is even more true for single mothers), the remaining family will struggle to pay the bills, pay the mortgage, pay off debts, and maintain their current standard of living.
An easy solution to prevent this sort of financial damage resulting from death is life insurance. Life insurance can pay off the mortgage, all of a family’s debts, and leave the family with enough money to live on until the other spouse retires or the children grow and become self-sufficient. If you are a woman in the workplace, you should have enough life insurance to cover the amount of money you will earn until you retire.
Women Need Life Insurance If They Don’t Work Too
Maybe surprising to some, life insurance can provide financial protection against the value of someone who doesn’t earn income directly but provides valuable domestic services such as childcare. While we hesitate to peg women as the primary source of childcare (more and more men are stay-at-home Dads for instance), women caretakers who do not work are extremely unlikely to own life insurance today. This puts their families at least as much at risk as an uninsured person who does work.
Childcare is very valuable. In most cases paying for childcare presents a difficult opportunity cost assessment for the family. Because childcare is so expensive, most families have to choose whether it is more economical to have a parent stay home and watch the child, or if it makes more financial sense to have that parent work and pay for third party childcare out of pocket. The high expense of childcare makes many people earning near the median income realize that they are actually equally or better off financially to provide their own childcare than they are to work and pay for care separately.
If a mother were to pass away, the family would be left to find other means to provide childcare, often at the expense of a full-time job on an annual basis. Even if it is not quite as expensive as 100% of a full-time job, it is still a considerable burden on the family.
The solution is once again life insurance. Life insurance can provide the family with sufficient cash to pay childcare expenses (and educational expenses) until the children are self sufficient. Even though someone may not work as an income earner, the services that they provide a family can still be very valuable in monetary terms (and other ways as well).
Young Mothers Are Woefully Under-Insured
An important finding of a study by Life Ant is that young women, and young mothers in particular, are one of the most underinsured demographics in America. Unless they receive a life insurance policy through their employer, they are extremely unlikely to be covered. Our research indicated that women under 30 are insured at rates under 20%.
Not only is life insure often needed by young parents even more than older parents (young parents are unlikely to have much money in savings), but life insurance is actually much less expensive to purchase when the insured person is young. These young parents, and young women, in particular, are missing out on an opportunity to protect their families at very affordable prices. Term life insurance policies can last for 30 years or longer, so if a person buys life insurance in their mid 20’s they may be buying the only life insurance policy they will ever need, at a great price.
Young women, and especially young mothers should realize that their lack of savings leaves their families very vulnerable to financial ruin from an early death.
Some Women Want To “Leave A Legacy”
Sometimes people buy life insurance because they want to be able to pass something substantial on to the next generation. They may want their children to never worry about money again after they are gone, and decide to own a permanent form of life insurance so that they are able to pass an inheritance on to their kids. In the industry, this purpose for life insurance is known as “leaving a legacy”
There is nothing wrong with doing this, and not only is it perfectly legal but it is also a fairly common reason that people buy life insurance. Life insurance benefits are passed on tax-free, so it is also a tax-efficient way to leave people a lot of money. Because life insurance is actually less expensive for women to buy than it is for me of the same age and health, many families choose a wife as the insured person to base a policy on. Lower insurance costs allow a husband and wife to maximize the amount of money going to their children. This is why many women who are retired still own life insurance.
How Women Can Buy Life Insurance
There are a number of ways that a woman can obtain life insurance coverage (the same applies to men). Here are the best ways to obtain coverage, starting at the least expensive.
Opt Into Coverage Through Work
Most employers today who offer employees benefits will offer life insurance coverage. It may be included as a part of your benefits package for no cost, but most often an employee will need to opt into the coverage, for a small fee. Usually, the fee is only a couple of dollars a month, so this is extremely affordable, if not free.
The life insurance coverage usually will provide a death benefit of 1 to 3 times the worker’s base salary, and sometimes it will provide up to 5 or 10 times the base salary but this is much rarer. These policies do not require any underwriting whatsoever. An employee can not be declined coverage, and it is usually little or no paperwork to opt into the program.
Today, most employer benefits are handled online. An employee simply needs to opt into the coverage on their companies employee benefits website, name their beneficiaries (who the money goes to if there is a claim), and the cost of the insurance will be deducted directly from their paycheck each pay period. The cost of the coverage is usually less than $5 per period, and oftentimes it is not more than $1 or $2.
The coverage does not expire as long as you work for the company. You do not need to worry about purchasing the “right length” of term insurance. This is simply a term policy that renews every year that you are employed. You will have the option to keep this policy after you are no longer employed. If it is a whole life policy, known as “ordinary whole life”, you will need to continue paying for it after your employment ends.
This is an excellent way to initiate basic life insurance coverage. There is a little hassle, you can not be denied coverage because there is no health exam and no questions regarding pre-existing health conditions, and it is one of the cheapest ways to obtain life insurance coverage. Obtaining life insurance from your employer should be the first place you seek coverage.
Add A Secondary Insured Rider Or Spousal Insurance Rider To Spouses’ Policy
Many life insurance policies allow for a secondary insured or second insured to be added to them. This is usually a term life insurance rider, meaning the coverage does not build cash value, and the coverage will expire at the end of the 10-20 year term.
Underwriting may or may not be required, but it often is not for policies under $50,000 of the face amount. This means less hassle, less paperwork, and no medical exams if there is no underwriting required, or limited underwriting only is required. You are not likely to be denied coverage for a secondary insured rider. There are special secondary insured riders made specifically for spouses as well, which may provide even greater benefits for less cost and hassle.
By adding a spousal insurance benefit or secondary insured benefit rider to an existing policy, you will save money over being issued the equivalent stand-alone policy. After applying for insurance coverage through your employer, this is usually the next most efficient way to obtain coverage.
Buying Your Own Policy
If you have already maximized your ability to get life insurance coverage through your employer and as a secondary rider, or if you are seeking a much larger amount of life insurance, you may want to purchase your own life insurance policy. Women (and men) can buy life insurance coverage in two ways.
- You can speak with a financial advisor. For large policies, it is probably wise to at least consult with a financial professional. They will make sure that you are choosing the right kind of life insurance, the right length of insurance (if you choose term), that you are funding permanent life insurance in the greatest strategic way, and that you are buying the right amount of coverage to suit your needs. A life insurance agent who is qualified (look for CLU or ChFC designations) can provide a lot of value to clients in personalizing a policy, especially when the policy being sought is on the bigger side.
- You can buy your policy online through a source like Life Ant. Life Ant can help you compare quotes to find the least expensive life insurance coverage. This is a good idea for everyone even if you are already working with a financial advisor. Because Life Ant compares life insurance quotes, we are often able to help clients get a better deal than the price for the insurance that their agents are recommending. If you do not feel like working with an agent, you can also compare life insurance quotes and order a policy through Life Ant with minimal contact with any agents.
You Will Need Underwriting
If you are purchasing your own policy, you will need to go through the full application process, including satisfying any underwriting requirements that the company may have for you. The application is usually about a 30-page document that includes questions about your health, your family’s health history, and the activities you engage in. Additionally, the application collects basic personal information about you and allows you to designate the owner, insured, payer, and beneficiaries. The application and the disclosures included as a part of the application will require many signatures by both the insured person and the owner (who may or may not be separate people).
Different levels of the health exam (medical exam) are required depending upon the age of the insured and the amount of the face of the proposed policy. A basic health exam may take only blood pressure and a saliva test, whereas a more comprehensive health exam may require blood, saliva, urine, and a cardiac stress test, among other basic questions and health checks such as blood pressure, resting heart rate, and reflexes.
The life insurance company will also access your medical records, and possibly the results of any other recent life insurance “paramedical” exams (the technical name for a life insurance health exam). The application will include the appropriate disclosures which allow the company access to these documents.
Women Pay Less For Life Insurance
Remember, women have an advantage when it comes to paying for life insurance. Because women statistically live longer than men on average, life insurance is actually more affordable for women than it is for men, if all other factors are equal. The price difference can be significant depending upon the age and health of the woman. A lower cost of insurance means that term coverage is cheaper, and whole life insurance policies with the same premium will accrue cash value at a higher rate for women than for a man of the same age and health.
Women Need Life Insurance
Regardless of whether a woman is an income-earning member of a family, a caregiver, or the family wants to “leave a legacy”, women need to own life insurance just as much as their men counterparts. Women have an advantage with a lower cost of life insurance and a better chance of getting a higher health rating than men.
Life Ant has life insurance policies for women and can help women save money on life insurance by comparing quotes from different providers. If you need life insurance, please enter your zip code in our quote box above to get started.