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Jun 28, 2021·7min

Everything You Need to Know About Life Insurance for Women

Life insurance is usually cheaper for women than it is for men, yet females are still underrepresented when it comes to getting a policy. That really shouldn’t be the case, which is why we’ve put this guide together, encouraging all the great women across the US to find a policy that suits them and their families.

All the single ladies put your hands up

Ok, so you don’t need to be single to get a life insurance policy, but how else would we fit a Beyonce reference into the title? There are some interesting facts out there about life insurance for women, though. For example, over half of Americans have life insurance, but only 43 percent of women have taken out a policy.

That’s according to the United States Department of Labor, which ran the numbers and found that not enough women have life insurance. Now, we could spend all day looking at the hows and the whys, but we think it’s better to show you why life insurance is so valuable if you’re a female.

So let’s get to it with everything you need to know about life insurance for women.

Life insurance is generally cheaper for women

We've got good news for you straight off the bat: life insurance for women is generally cheaper than men's. So if you're a healthy, young-ish woman, then you're seen as less of a risk than a man.

The majority of states offer more affordable premiums because women have a higher life expectancy. It’s probably also safer to say that women tend to make smarter and safer decisions than men, but hey, we won’t go there today.

If you’re a woman and thinking about getting life insurance, the good news is that you’ll probably save money on a male counterpart who fits your age and health profile. We’re already off to a good start; who doesn’t like saving money?

Why you should take out a life insurance policy as a woman

There are many misconceptions around life insurance, which may be one reason why women end up not taking out a policy. We're here to bring you the facts, and we think you'll be pleasantly surprised with the info we have about life insurance for women.

No income doesn’t equate to no policy

While the landscape is improving, women are still more likely to be the stay-at-home parent who doesn't have an income. Therefore, they might wonder if there's any point in getting life insurance. The answer is a resounding yes. Covering the cost of all the work you do at home certainly isn't cheap, and it holds its value. That's why life insurance policies are available for men or women who stay at home to look after their children. Moreover, you don't need to be in a salaried job to benefit from coverage.

Employer group life insurance isn’t enough

Many employees have a group life insurance policy, but the coverage usually isn’t enough to sustain a single woman, let alone one with a family. Coverage is usually capped at $50,000 (or a percentage of your salary), and if you leave your job, it’s back to square one as your policy becomes null and void. Having a work policy is great, but you should top it up with personal life insurance and not rely solely on your group life insurance.

Just as–if not more–important than men

Men tend to make more money than women (we know, we know), but that doesn’t mean a policy for a woman holds any less weight. There tends to be a status quo that the breadwinner gets life insurance, but having a policy–whether your partner has one or you’re a single parent–is important for both you and your family’s future. You should look into coverage no matter your home life situation.

Long-term care insurance

On average, women live around five years longer than men and therefore should think about long-term car insurance (LTC). It covers you for longevity and provides caregiving when perhaps your partner can’t. That’s important, as women have higher rates of disability and chronic health problems. It’s also worth noting that LTC insurance costs the same for women as it does for men, even though females are at greater risk of needing long-term care. Around 70 percent of women will need long term care at some point in their life, which is another reason why you should consider taking out this type of policy.

Which option should you choose?

Term

A term life insurance policy covers you for a specific amount of time, typically anywhere between 5 and 30 years. Each month, you pay into the policy, and if something happened to you during that time, your beneficiaries receive a death benefit. However, once the term has ended, that's it. There are no extra benefits, and you will need to pay a higher premium if you wish to renew because that thing called time has caught up with you, and you'll be older and therefore deemed a higher risk.

Permanent

A permanent life insurance policy has all the benefits of term cover plus a whole lot more. For starters, it doesn’t expire, so you pay one monthly payment throughout your entire life (unless you stop the policy). This makes the premiums more expensive in the short term but provides greater value in the long term. How, you ask? Allow us to explain.

Why permanent life insurance offers long-term value for women

Along with a death benefit, permanent life insurance offers several benefits while you’re still alive. Therefore, it’s better to think of it as a savings account with a payout to your loved ones should the worst happen to you.

Cash value

When you take out permanent life insurance you pay into two separate pots: one for your death benefit and another for cash accumulation. That cash-value aspect accrues value over time and can be accessed later in life. Let's say you pay into it for 25 years. It will grow in value during that time, and you can withdraw it to spend on whatever you like.

Tax-free

It's also tax-free, which isn't something you can say about many investment accounts. Every dime that you grow in your permanent life insurance account doesn't accumulate tax. And when it comes to withdrawing the funds, you won't have to give a portion of it to the taxman. You might wonder how that works? Well, when you draw down the money, you're essentially loaning it against your death benefit at 0%. It's all tax-free because you can't pay tax to yourself. Then, when you pass, your death benefit pays back the loan–and because that has also built up wealth over time, you will still have plenty to leave to your loved ones.

A fixed premium amount

Permanent life insurance policies remain for the entire time you keep making payments, which means they don’t need renewing. That’s a bonus because you will still pay the same premiums 30 years after you took out the initial policy. Unlike term coverage, your premiums don’t go up. Good times.

In conclusion: life insurance for women

As a woman, you should 100% consider a life insurance policy. It can protect both you and your family while providing benefits while you’re alive. From cash-value aspects to tax-free withdrawals, life insurance for women is just as important as it is for men. So now’s the time to start thinking about your future and cover yourself.

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