As a woman, typically, your natural role is to be the nurturer and caregiver for your family. Caring for your spouse, children, parents, and being a confidant to friends while being a boss entrepreneur or corporate leader. Women play a vital role in the day-to-day operations of their families. This makes having the right type of protection via life insurance very important.
Why life insurance is so important for women
Life insurance for women is a crucial part of financial planning for the whole family. Imagine the matriarch of your family becoming ill or passing away. A tragic event will not only result in an emotional loss but a substantial impact on the operations of the household as well as the finances.
The impact of being a wife, mom, caregiver, and so many other hats women wear can take a toll on your body. While an illness or tragic event is never a happy topic to discuss, it is very important to ensure you have the right plans in place. Especially if you are a contributor to your family income or the sole provider.
If you are single, life insurance can help pay off your debts, taxes, medical bills as well as offset expenses your family may incur. If you are a caregiver, single parent, or a working mother, life insurance can help buffer the loss of your income. It can also support future expenses for your children or family. Considering these factors, women should seriously consider investing in life insurance that offers living benefits.
Don't underestimate your worth
A common mistake when it comes to life insurance for women is underestimating their worth, aka not having enough coverage. Whether you are a female breadwinner or a stay-at-home mom, you need to ensure you have insurance coverage for your family's financial needs.
In a survey, 79% of men say they had life insurance, while only 67% of women had life insurance. The amount of coverage difference in life insurance for women versus men was a whopping $191,670! This is a huge amount that could be beneficial to your family if something were to happen unexpectedly.
Of course, everyone's financial situation is different. Determining the amount of life insurance you should have can be a challenge. One of the most recommended methods is known as "The dime formula."
This formula has you take a more detailed approach to your finances. It has you consider your total debt, final expenses, mortgage payoff, and the cost of education for your children. Similar to creating your financial plan, you will need to plan out precisely what type of coverage you should have.
Deciding between term life and whole life insurance
When it comes to determining what life insurance will work best for you, it's all about your unique needs. There are two main types of life insurance and they are term life insurance and whole life insurance.
- Whole life or permanent life insurance is a type of life insurance that combines life insurance with investments. This addition of investments is called "cash value" and is placed in a cash-value account.
- Term life insurance covers is a type of life insurance that covers you for a specified number of years and has no cash value account associated with it. As a result of this, the premiums are often lower than a whole life policy.
What about living benefits?
Living benefits can be part of your term life or whole life insurance and provides coverage while you are living in addition to the death benefit.
This key benefit is a lifesaver for many families who experience a terminal, critical, or chronic illness and require steady income to cover expenses. This is where living benefits kick in to provide supplemental income to the insured. Living benefits can provide coverage in three major categories of illness.
- Terminal illness: An illness that will result in death in 24 months of diagnosis by a physician.
- Critical illness: Examples include ALS (Lou Gehrig's disease), Heart Attack, Stroke, Cancer, Blindness, Sudden Cardiac Arrest, Major Organ Transplant, etc.
- Chronic illness: A doctor has certified, within the past 12 months, that you are unable to perform 2 out of 6 "activities of daily living" for a period of at least 90 consecutive days without assistance or you are cognitively impaired.
At the end of the day, you want to protect yourself and your family with the right life insurance. One that ensures you are all well taken care of in the event of illness or a tragic accident.
Budgeting your life insurance policy
As with any expense, you want to be sure you budget for the cost of your life insurance policy. This is a necessary expense, and if it means cutting out other unnecessary expenses to cover it, you should do it.
Again the cost of life insurance for women will vary based on age, health history, occupation, policy type, etc. Remember to speak with an agent to ensure you get the best policy that fits you and your family's financial needs.
When should you invest in life insurance?
Investing in life insurance is best done while you are still young and relatively healthy. The older you are, the higher the risk class you could be placed in. This impacts the cost of how much you will pay for insurance.
Once you invest in life insurance, be sure to make the people you trust, and you want to protect aware that it exists. This way, they know it is available in the event of an illness or death. For instance, your spouse and your children (and even your estate lawyer as part of your estate plan).
When is the best time to buy life insurance for women?
When it comes to life insurance, regardless of gender, it's best to purchase a policy you can afford at a younger age. This is because life insurance premiums are the lowest when you are younger.
However, if you are older and also in good health, depending on the underwriting process, you can shop around to get the best possible rates based on your age. If you are thinking about life insurance, the next best time to buy it is today.
As opposed to looking at life insurance as an expense, consider it an investment to protect your life. When it comes to life insurance for women, it should be just as important as auto, home, and/or renters insurance.
If I can offer any advice to women, it would be to value your life just as much as you value others and get insured.