The Gender Gap in Life Insurance
When it comes to financial differences between genders, pay isn’t the only area where there’s a disparity between men and women. Did you know there’s a gender gap in life insurance coverage, too?
According to a 2023 study from the Life Insurance and Market Research Association1 (LIMRA), only 49% of women have life insurance, compared with 55% of men. Furthermore, 44% of women say they either need more life insurance coverage or need to purchase life insurance altogether.
Regardless of gender, everyone can benefit from life insurance. However, given the life insurance gender gap, women have unique considerations when it comes to life insurance coverage. Let’s explore why is the gender gap so pronounced when it comes to life insurance and the steps women can take to feel empowered to make decisions about coverage.
Why is there a gender gap in life insurance?
The gender gap in life insurance can be attributed to many social and economic sources. The following factors are just some of the reasons that women may choose lower policy limits or forgo purchasing life insurance:
Lower Earnings: The pay gap for women persists, with The U.S. Bureau of Labor Statistics reporting that women’s earnings equated to 83.6% of men’s earnings in 2023. Those lower earnings may convey to women that they don’t need to purchase as much life insurance to protect against the loss of their income.
Undervalued Unpaid Labor: Full-time caregivers contribute much to the household and to their families’ financial well-being. In fact, nearly 80% of the unpaid labor needed to maintain a household and support a family is done by women. Stay-at-home spouses sacrifice the earnings they would make at an office job or a job that took them out of the home. If they were to stop doing that work, the economic impact would be noticeable and immediate, but because they aren’t financially compensated, many stay-at-home spouses don’t consider purchasing life insurance as a safety net for their families.
Reduced Financial Literacy: Another driver of low life insurance adoption rates among women is reduced confidence when it comes to financial decision-making. Overall, 27% of women say they’re not comfortable with their knowledge of personal finances.1 Furthermore, life insurance as a financial product is often confusing. While most working women know their families rely on their paychecks and that said income needs protection via life insurance, they may not know that group life insurance coverage offered through work is often insufficient. Still, others may not understand that life insurance can help pay off outstanding debts like auto loans, student loan debt, or funeral expenses in the event of their death.
How to Close the Gender Gap in Life Insurance
With so many factors influencing the gender gap in life insurance, how do we close it? Education plays a major part, but what does that look like? It starts with helping women understand the life insurance options available to them, as well as the pros and cons of buying each type.
Term Life Insurance
Term life insurance is among the most affordable life insurance options because it offers lower premiums than other life insurance policies. When buying this kind of policy, you choose the amount of coverage you desire and the length of time you want that policy to be in effect (the term). Most people purchase 10-, 15-, 20-, or 30-year term life insurance policies.
Once the term expires, you will need to either convert it to a whole life policy at a significant expense or purchase a new term life policy.
Whole Life Insurance
Whole life insurance is more expensive than term life insurance. This type of policy offers lifetime coverage and level-set premiums that never change for the duration of the policy. In addition to the death benefit, whole life insurance policies offer a cash value component that the policyholder can borrow against and use as a type of savings account.
Let SelectQuote Help Find the Right Life Insurance For You
The life insurance gender gap is a singificant issue for many women, but it doesn’t have to be. If you have questions about purchasing life insurance and providing financial peace of mind for your family, SelectQuote can help. Our experienced team of licensed insurance agents specializes in finding life insurance policies that can meet your needs and are with you every step of the way to answer your questions. In just minutes, we’ll shop dozens of highly rated carriers on your behalf, saving you time so you can quickly find your loved ones the protection they need.
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