In the classic nuclear family of the 1950’s and 1960’s, life insurance coverage tended to focus on the typically male breadwinner. Stay-at-home mothers were often not covered at all. Today’s family is considerably different, with almost two-thirds of mothers being either a co-breadwinner or the primary breadwinner for the family, according to the report “Breadwinning Mothers, Then and Now”. As a result, the insurance “gender gap” is closing – but it still exists.
According to LIMRA (Life Insurance and Market Research Association), 60% of women have some type of life insurance — including employer-provided policies — in 2010, almost the same percentage as men. However, the average coverage dollar amount for women is only 69% of that of men. The bottom line is that too many women remain uninsured and underinsured.
As a woman, there are multiple reasons you should be insured – although the reasons may be different for different circumstances or at different stages of life.
- Breadwinners – Whether you are a sole breadwinner or a partial breadwinner, your contribution to the family income would be difficult to overcome without life insurance. Even if you have some form of coverage through work, it may not cover all of your family’s needs as they pick up the pieces.
More women are becoming entrepreneurs and small business owners as well as breadwinners, which may add another layer of obligations with employees and company expenses – and therefore, another level of life insurance needs and requirements.
- Stay-at-Home Mothers – While society is becoming more accepting of the stay-at-home dad, women make up the majority of married partners staying home and taking care of children. Taking into account today’s costs for daycare, housekeeping, and transportation, it is more important than ever that stay-at-home mothers have insurance coverage.
Annual daycare costs alone in some areas can be more than college tuitions , with values over $15,000 in high-cost states. Life insurance can allow your surviving spouse to continue with work and try to regain a sense of normalcy for the family.
- Single Mothers – For single mothers, combine the above reasons and multiply the effects. Single mothers may feel that they cannot afford life insurance with their income and the costs of raising children, but living on a tight budget is the very reason why life insurance is so important. The income allows your family to recover financially as well as emotionally.
- Multiple-Generation Caregivers – Some women are stuck caring for both young children and aging parents, further increasing the level of dependence. Life insurance may be necessary to provide a bridge for eldercare as well as childcare.
- Women Nearing Retirement – Women outlive men in general, and often have concerns about running out of money in their later years. Life insurance can provide a layer of protection against any potential loss of spousal benefits.
However, with more women in the workforce and with blended family finances (or in some cases, their own), more women should consider having their own life insurance retirement benefits. For example, permanent life insurance can provide supplemental income during the later years. It is not necessarily the best return on your money, but it does provide a high level of security.
In short, women are often underinsured because they are often undervalued financially – either they undervalue themselves or they are undervalued by others – and thus do not always see the need for insurance. They tend to take better care of others than of themselves.
Don’t undervalue yourself; objectively assess what type of insurance, if any, is best for your situation.