The Unique Life Insurance Needs of Women

By on May 15, 2018

Many women have either no or too little life insurance. Historically, women were almost never adequately insured, however, today men and women are usually equal partners in supporting families on two (or more) paychecks. Life insurance is vital to ensuring your partner has a financial safety net when you pass.

We all have different life situations requiring different forms and levels of coverage. Some life insurance policies cover you for the time period you need it most, some last for your entire life, and others build cash value which you can use for retirement, funding a child’s college tuition and more.

Why Women Need Life Insurance

With greater economic power, comes greater responsibility. If anything happened to you — and the income you generate — would your family be able remain in their home? Would your children be able to achieve their educational goals? Would your family suffer a severe financial loss? Adequate life insurance can replace your income, remove uncertainty and help guarantee your family’s financial security.

Whether you are part of a two-income family, a single woman head of household, or a full-time homemaker, chances are you very little life insurance coverage. Equal financial partners does not always translate into equal protection based on employment benefits. Single mothers may be the sole breadwinner, responsible for the support and care of your children, in which case the need for life insurance is even more crucial than in dual-parent households, which will have another source of income if one parent dies. Additionally, homemakers tend to underestimate the value of their contributions, however, consider the financial strain your partner will encounter to manage the house and children without you.

Your responsibilities and financial obligations can be met with life insurance. Coverage will help protect your partner and, possibly, children. Term policies can help provide assistance for funeral expenses for as long as you think you will need to support your family. A cash value life insurance policy can help you accumulate funds on a tax-advantaged basis to supplement your retirement income or generate wealth.

Life Insurance for Women 101

Whether you’re a parent or a professional, just starting your career, in transition, or nearing retirement, you need to ensure your future – and that of your dependants – is secure. Life insurance is one of many financial safety nets.

Here are some basics about each type of life insurance policy; some policies may work better for certain financial or dependency situations. Explore each of these life insurance types in more depth and ask a trusted agent or financial advisor for assistance in picking the best policy for you!

  • Term insurance: The simplest form of life insurance. You purchase coverage for a specific price for a specified period (for example 10, 20, 30 years). If you pass during that time, your beneficiary (spouse, children or other dependants) will receive the value of the policy. There is no investment or cash value component.
  • Whole Life: This is the first of several types of permanent life insurance policies which will cover your “whole life” not just a set period. Premiums remain level throughout the life of the policy, and the insurer may invest a portion of your premiums to keep your costs low or return to you in the form of a dividend payment. Many companies will offer a relatively low guaranteed rate of return, but often pay returns at a rate in excess of the guarantee.
  • Universal Life: Another permanent policy which allows you to build cash value from investments over and above a minimum premium. The company chooses the investment vehicle, which is generally restricted to bonds or mortgages. The investment and the returns go into a cash-value account, which you can use against premium payments or for any purpose of your choice (ie. retirement, college tuition, home mortgage, etc.). With some policies, sometimes called Type I or Type A, the cash account goes toward the face value of the policy on the death of the policyholder. With a second variety, sometimes called Type II or Type B, the beneficiary receives the face value of the policy plus all or most of the cash account. While Type II is meant to provide a partial hedge against inflation, it demands higher premiums as you get older than Type I.
  • (Universal) Variable Life: This variation of a universal policy allows policyholders to choose their investment vehicles. With a variable policy, there is usually a wider selection of investment products, including stock funds. As with a universal policy, returns on investments can offset the cost of premiums or be withdrawn for personal purposes. Depending on the type of policy, the beneficiaries will either receive the face value of the policy or the face value plus all or part of the cash account.

If you choose whole life insurance, the cash value in your policy can be borrowed against to help pay for life’s events such as buying a home, sending children to college, paying for a wedding, starting a business or supplementing your retirement income. As you pay the premiums of your whole life policy, the cash value builds and you can access those funds via policy loans. Keep in mind, however, that these loans accrue interest and may decrease the death benefit or cash available for your beneficiary.

Life insurance can help women leave a lasting financial legacy for your kids, your spouse/partner or dependants – even your favorite charity or alma mater. Consider your financial obligations such as a home mortgage, outstanding debts or medical expenses and consult with a trusted agent or financial advisor to your life insurance policy can help ensure your obligations are met.

Take the next step - Let's talk!

Remember to speak with your financial, legal or tax professional for more information about the topics which interest you. Here are a few ways for you to share your ideas, learn more and interact with FinancialSafetyNet members, authors and expert advisors.
Have a question, but don't want to share it with everyone? Contact a financial advisor.
Want to contribute to the conversation publicly? Submit a comment.

Submit A Comment

About Harold Goldman

I am the founder of FinancialSafetyNet.org, and a Retirement Planning and Long-Term Care specialist. I am also the President of Emes Insurance Services, Inc., a Murrieta based insurance agency designed to help people with Retirement Planning and funding for College. I believe in educating my clients to become financially competent in an effort to develop plans for guaranteed income, protection against loss and tax-advantaged growth. To contact me Call (844)-376-2265

You must be logged in to post a comment Login

Leave a Reply