How you can Narrow the Life Insurance Gender Gap


Our Gender, Roles and Life Insurance Survey showed that there's a life insurance gender gap, but what can be done about this.

Only 67% of ladies surveyed said they'd life insurance, when compared with 79% in men. Of those who had an individual life insurance coverage, the ladies had an average coverage amount of $231,342, compared to men who had a typical quantity of $423,102. This means that men with life insurance valued their lives financially nearly Twice a lot more than women with life insurance coverage.

This doesn't mean that men think their lives are two times as valuable as women's, obviously. It just implies that, because of external factors, such as gender pay disparities and life insurance coverage suppliers that prompt people to choose coverage based on income, men tend to have more life insurance coverage than women.

The life insurance gender gap gets even more pronounced in households in which the man is the primary income earner and the woman is the primary caregiver. A stay-at-home mom may not consider getting a life insurance policy, for example, but which means her family will have to learn how to cover the cost of child care should she dies.

How are we able to solve the life insurance gender gap, and help families get the life insurance coverage they need?

It may be time for men and women to prevent thinking of life insurance as a way to cover lost income and start thinking of it as being a way to provide future financial stability. Here's how you can help solve the life insurance gender gap.

Understand what can cause the life span insurance gender gap

Why what is the significant gap in life insurance coverage between women and men? “There are a number of factors in play here, beginning with the traditional life insurance wisdom, which states that you should have coverage that's five to Ten times your earnings,” explains Brittney Burgett, Haven Life's marketing and communications director. “That's problematic when you are taking a look at coverage for a stay-at-home parent, that the most of [survey] respondents agreed must have insurance coverage.

Burgett helped spearhead the Gender, Roles and Life Insurance Survey, and hopes it will help parents make smarter decisions about their life insurance needs. “One of the fundamental problems with life insurance coverage is that you may still find some antiquated viewpoints about life insurance only being required for the primary earner in the household,” she says.

Brendan Willmann, a CERTIFIED FINANCIAL PLANNERTM professional at Granada Wealth Management, agrees. “If one spouse is solely a caregiver, the standard advice would be to think about a relatively low amount of coverage. However, the financial contribution of the stay-at-home parent is frequently underestimated.”

Both partners play a key role in ensuring the financial stability of the home, whether or not they generate income or provide day care – but traditional life insurance advice, which suggests men and women purchase coverage commensurate with their income, doesn't acknowledge that reality.

Consider insurance coverage for partners

If you want to solve the life insurance gender gap, consider dealing with life insurance coverage for partners. When just one half of a few gets life insurance coverage through an employer, for instance, you're ready to start looking into other coverage options.

“Many people depend on employer-provided life insurance, that is not often enough,” Burgett explains. Since employer-provided insurance is often based on income, the gender pay gap feeds into the life insurance coverage gender gap – and the coverage gap gets even bigger in families where males are the primary earners and ladies are the primary caregivers.

Men and ladies can address this problem by buying their own term life insurance policies to equalize the space and be sure their family is fully covered.

“I suggest couples consider a higher benefit amount for any shorter-term,” Willmann says. “This allows for reasonable premiums while providing adequate protection for that breadwinner in the event the caregiver of their children passes unexpectedly.”

Betty Wang, a CFP(R) professional and founder of BW Financial Planning, offers similar advice. “I recommend exactly the same dollar amount for that breadwinner and caregiver, especially if the couple have children or people who are financially dependent on them. If the caregiver would perish, the breadwinner would need to either undertake the caregiving responsibilities (which may remove from earnings) or hire qualified help.”

Burgett agrees. “That's the main thing I would like to see more of coming out of carrying this out research,” she explains. “Looking in the quantity of life insurance you need less as a multiplier of your salary, but really recognizing the equal impact that both mom and dad bring to your family regardless of what their wages are.”

Make sure you will find the correct amount of coverage for your family

To solve the life span insurance gender gap, think of life insurance coverage as a way to cover a family's financial needs rather than a person's income.

A life insurance calculator can help you determine what level of coverage you have to protect your family and cover similar financial responsibilities, for example shared debt from a mortgage, car loan or credit cards

This calculator even works if you're a stay-at-home parent. If you put your income at $0, for instance, the Haven Life calculator wouldn't assume you didn't need any life insurance. “It would look at the quantity of children, how old your children are, does your spouse work, how much does your spouse earn,” Burgett explains, “to provide you with an estimation based on the financial obligations you have and what your loved ones structure looks like.”

In addition to consulting an existence insurance calculator, couples can also ask themselves what new expenses might show up after one partner passes on. “Consider what would happen to your family if there was just one parent,” Burgett suggests. “How is child care likely to exercise?”

Since life insurance coverage is made to protect the entire family, calculating the true cost of every member's labor, whether performed in the home or outside from it, can help you determine how much coverage you'll need.

Once starting acknowledging that unpaid caregiving has just as much value as paid employment – and yes, that includes financial value – we'll start to start narrowing the life span insurance gender gap. We are able to choose to solve the life span insurance gender gap by ourselves, one family at a time.