Do women buy life insurance as often as men? And does gender matter when it comes to owning a life insurance policy? It turns out, women may have different reasons for buying coverage than their male counterparts. And when it comes to insurance policies, gender equality isn’t exactly the name of the game.
According to a 2021 study by LIMRA and Life Happens, only 47% of women own life insurance policies compared to 58% of men. It’s not that men need insurance more than women. In fact, in some instances women benefit more from insurance.
But policies are often owned by the primary provider in a household, who is historically male. Men may be more likely to have coverage through an employer compared to women who may not be working enough full-time hours to qualify for insurance benefits or who are more likely to do freelance/gig work while raising a family.
What’s more, women are statistically likely to outlive their male counterparts, which fuels the misconception that women don’t need life insurance as much as men. What it does mean is that it’s more important for a woman to choose the right type of insurance policy that corresponds with her longer life expectancy.
For example, a term life insurance policy, which only provides coverage for a predetermined amount of time, is more likely to pay out a death benefit for a man than a woman. Odds are she is more likely to outlive the policy term. Therefore, women may be better candidates for a permanent life insurance policy, like whole life, which is guaranteed a death benefit payout.
Read more: Term vs. Whole Life Insurance for Women
WHY DO WOMEN NEED LIFE INSURANCE?
Some of the reasons why women and men buy life insurance are the same. Both need financial protection in case of the unexpected. Both want to leave a financial legacy.
But for women, insurance policies are often about more than replacing lost income. If you make less income than your partner but are shouldering the majority of responsibilities like taking care of a child or parent, cooking and meal planning, cleaning and managing a household, all of these actions have value. Without you, your partner may have to step back from work or outsource help.
What if you outlive your partner? A whole life insurance policy has a built-in savings component called cash value that can be accessed tax-free during your lifetime to increase cash flow and supplement retirement income. It grows every time you pay your policy premium, but it also earns a guaranteed rate of return and non-guaranteed dividends.
WHEN DO WOMEN NEED LIFE INSURANCE?
Generally, the younger and healthier you are, the more likely you are to be approved for an insurance policy and receive a favorable rate. For men, having children is often a major life milestone that triggers the desire for an insurance policy. But for women, it may be better to buy a policy before having children.
Although most women don’t suffer lasting complications after pregnancy, there is a risk of developing certain medical conditions that may make life insurance harder to qualify for or more expensive. If you’re already pregnant, you can still apply for insurance and qualify for a favorable rate.
POLICY PREMIUMS: MEN VS. WOMEN
Let’s talk dollars. When it comes to insurance, the same is true for cars as it is for life: Women tend to pay less. And when you buy whole life insurance, you lock in your premium payment for the life of the policy.
If you’re married or in a domestic partnership, often it’s more affordable for you and your partner to have separate policies. This is especially true if one of you isn’t in great health or if there is a significant age difference. But it may be worth considering a joint or survivor life insurance policy that covers you both under one premium. These can be structured to pay out a death benefit to the surviving partner, or pay out a death benefit to your children or estate after you’re both gone.
WHERE TO BUY LIFE INSURANCE FOR WOMEN
Too often, women don’t feel financially empowered enough to make decisions surrounding their own financial security. We aim to change that by providing free financial education and free virtual consultations with professional Wealth Strategists to help you make informed decisions.
If you’re interested in learning more about a whole life or joint life insurance policy, we work with nations top-rated mutual insurance companies to find the right policy for your budget and financial goals.