Research shows that women pay less for life insurance however fewer women have life insurance policies. Why is that?
Perhaps because common knowledge about life insurance hasn’t caught up to our more gender-equal world. Some families operate as dual-income households while others have a parent (usually the mother) do the equally important job of staying at home to raise their children. In recent years, we have become better at recognizing the value of stay-at-home parents considering the high expenses related to childcare, housekeeping and other tasks taken on at home. Unfortunately, in the event of death of a stay-at-home parent, these costs may no longer be affordable for families but still very much needed.
Whether working outside the home or as a stay-at-home parent, the real question women should be asking themselves is: What kind of quality of life would my family have without me? Life insurance can provide your family with financial security to help with all the invisible costs that are provided, but never has a dollar figure associated with it.
Why don’t women buy life insurance as often as men?
Women who do have life insurance often have a smaller policy than their spouse, or a smaller policy than the average man who makes a similar salary. When looking at why women and stay-at-home spouses are less likely to have full life insurance policies there are some factors that can influence the decision:
- Families don’t understand the full cost: The cost of losing the main caregiver (usually the mother) may be higher for the average family than the cost of losing the working spouse. Not only does the family lose the woman’s income (if she is working outside the home), but the surviving spouse typically also needs to pay for the childcare and running the household that was provided for. Women on average spend more hours on childcare than their partners, and it is very expensive to pay for childcare to cover that gap. One study found that single parents spend a third of their income on childcare. Women may not be life insurance policy holders because the large financial gap that needs to be filled simply may not be recognized by the family.
- Women aren’t often breadwinners: It is still less common today for women to be the sole breadwinners of their family. A persistent belief is that only the breadwinner should have a life insurance policy. This attitude could be a result of underestimating the true value stay-at-home parents contribute to the household.
- The timing of when we buy life insurance: Many people end up purchasing life insurance when they first buy a house or once they are starting a family. At this time, it’s perhaps easier to see how the loss of one’s spouse or partner could have the potential to financially devastate the family.
How can life insurance benefit your family and your future?
We’ve done a lot of myth-busting to help women see the value they bring to their family. Still, you might be wondering exactly how life insurance works and how it can help protect your family if you happen to pass unexpectedly. Essentially, the number one reason that life insurance is important is because it can provide your family with financial security. Having a life insurance policy can replace your income and the costs that may not be taken into account, so that your family doesn’t need to change their lifestyle. After a spouse or parent dies, families without life insurance, or with too little coverage often can’t keep up with their financial obligations, resulting in changing their lifestyles or moving to a new neighbourhood to stay financially afloat.
As noted earlier, keep in mind that your family’s living expenses could increase when a parent is gone. Think about how many hours of childcare you provide when your spouse is working, or just taking a well-earned break. You may also take on the lion’s share of tasks, from cooking and cleaning, car pooling and the list goes on.
Comparatively, many single parents are required to pay for childcare even just to go to work. They also must spend hours on end managing the house, social lives, kids’ sports, etc. Having life insurance to support your children and help the surviving parent is important for their well-being.
If you purchase a life insurance plan, whether single or married, you’ll get the peace of mind knowing your family will be better off financially if the worst should happen. Money isn’t a replacement for you. But, with it, your family will at least be financially protected.
What About the Cost?
It naturally makes sense to weigh the benefits of life insurance with its cost. It’s important to note that many people find that life insurance isn’t as costly as they think, especially as a woman. Women on average (all things being equal) pay less when it comes to life insurance. Depending on your specific policy and health history, you might pay less than what your husband or common-law partner pays for similar coverage. Term life insurance coverage for example offers coverage for a specific number of years, such as 20 or 30 years. If you outlive your policy, then the insurer won’t have to pay out. This is where gender plays a role in setting insurance rates, since male life expectancy is lower, insurers want to be prepared for having to pay out the policy earlier. This is why males typically pay more for life insurance than females. However, if you buy a whole life policy because the policy is guaranteed for life, insurance rates are less likely to be based on gender.
Take Control of Your Future
It often takes an introspective moment to determine your true financial worth. Though you may not be the primary breadwinner, this should never devalue your worth. The loss of a stay at home parent is a devastating blow emotionally and financially to a family. Taking proper steps to safeguard your family’s future is a smart and caring investment to make.