Life Insurance for Women | Best Types and What to Consider

In this article...
  • Discover the unique considerations when choosing life insurance for women, including when a policy is essential and how it can help prepare for the future.

There’s still a gender gap in many areas of modern life, and it can be seen when looking at life insurance for women. One study by Haven Life found that only 67% of women with children under the age of 18 had life insurance, compared to 79% of men. Of those with life insurance, men’s average coverage amount was almost twice as high as women’s. These figures are concerning, as life insurance can be essential to the financial health of women and their families. Understanding how life insurance works and when to invest in it is an important step in closing the gap. 

Why Get Life Insurance?

Most people start thinking about life insurance when they start a family. People purchase policies to help ease the financial burden that would come from their death. If your wage helps ensure family bills are paid or if you’re the primary caregiver, life insurance can make a big difference if the worst happens. 

Some life insurance policies can also help women during a divorce. Permanent life insurance policies, which also save money as an investment, are a divisible asset and can provide women with the funds to build a new life. 

Single women may also want to consider life insurance. Although there may be more profitable options for investing money, even a small life insurance policy can help your family pay for any medical expenses, clear your debts and cover the cost of a funeral if you die. 

There are other reasons to invest in life insurance. If you own a business, the proceeds from a policy can help keep the business running in the event of your death. Likewise, if you own a large estate that isn’t easily liquidated, such as a ranch or farm, a life insurance policy can help your heirs pay estate taxes. 

What to Consider When Getting Life Insurance for Women

There are a number of things to consider when purchasing life insurance. The amount of coverage you need depends on a number of factors, including your financial obligations, how old your dependents are and your wage. 

Life insurance for women can be even trickier, as they have to think about the cost of replacing them in the home. One 2019 study found that stay-at-home moms perform around $178,000 worth of work around the home. This makes life insurance essential if your partner needs to hire someone to perform even a fraction of the child care or housework you normally handle. Even if you work outside the home, you need to consider whether your partner will need additional help around the house if you’re no longer around. 

Many women also provide care for elderly parents and other relatives. Think about everything you do for your family when making a decision about the amount of life insurance coverage you need. 

Which Is the Best Insurance for Women?

There are three common types of life insurance. 

  • Term life insurance. This guarantees the payment of a benefit if the covered person dies in the term that’s covered. Once the term expires, you can renew or terminate the insurance or convert it to permanent coverage. Premiums are based on your age, health and life expectancy and are usually more affordable than other forms of life insurance. There’s no return from this type of insurance if the covered person stays alive. 
  • Whole life insurance. This covers a person for their entire life, not just until a specified age, and gives a guaranteed amount to beneficiaries upon the death of the covered person. Most have a withdrawal clause that gives a cash benefit if the policy is canceled, but it won’t be as much as you put in. 
  • Universal life insurance. This works similarly to whole life insurance, with the added benefit of an investment savings element. The policy provides a death benefit, with additional cash that you can access and borrow from. This savings element can accrue interest or be invested, depending on the policy. 

Together, whole life insurance and universal life insurance are known as permanent policies. These policies do have advantages, including the fact that there’s no expiration date for the benefits. Permanent life insurance policies can also give you access to cash, either through canceling the policy or accessing the savings of a universal policy. This can be beneficial to women who often have less savings in retirement or who may find they need money when a relationship ends.

The affordability of term life insurance can make it a better choice for many women. This is especially true if you have a young family and want to make sure they’re protected. Remember, these policies can often be converted to permanent policies after the term ends, when you may be in a better financial position. 

How Much Is Health Insurance for a Single Woman?

If you’re single, you may not feel like you need life insurance because you don’t have a partner or children. In many cases, a robust health insurance policy is a better investment. In 2020, 61% of working-age women had employer sponsored insurance, and 11% were uninsured. Only 7% purchased insurance directly through the Health Insurance Marketplace. Having good health insurance helps you stay healthy by funding trips to medical professionals, and it can help alleviate the need for life insurance because you don’t have to worry about surviving family paying for your medical bills. 

Health insurance costs can vary widely. Because health care is regulated on a state level, where you live is a primary factor in determining a policy’s cost. Other elements that can impact the price include your age, any copays and deductibles on the policy, the amount of coverage you need and whether you qualify for government subsidies. 

With all these variables, it can be difficult to give an estimate of the cost of health insurance. Under the Affordable Care Act, insurers can’t charge different amounts based on your sex, so the price of an individual plan is the same for men and women. 

In 2020, the annual average cost of employer sponsored insurance for individuals was $7,470. The price for a directly purchased policy is harder to come by. One study showed that in 2018, monthly premiums for a 40-year-old non-smoker making $30,000 per year would range from $244 in Michigan to $631 in Delaware. The Health Insurance Marketplace can show you estimated prices for your state.

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