Women often lack life insurance coverage or have less than they need because they aren’t seen as the family's breadwinner or higher-income earner. But in recent decades, women’s roles both in the household and the workforce have changed dramatically.
Only 47% of women are insured compared to 58% of men, even though many women contribute significantly to their family’s financial wellbeing, often while caring for their loved ones. In fact, 60% of primary caregivers are women, frequently serving in this capacity with limited support while managing other responsibilities including careers.
Women deserve attention and accommodation for protecting the value they provide to their families, loved ones, employers, and communities. When it comes to the insurance gap for women, there are several ways we can help them understand life and disability insurance options and provide them with the coverage they need.
When we talk about an insurance gap, we’re exploring the disparities in coverage between men and women. Less than 50% of the women we surveyed have life insurance, and only 25% have coverage beyond the policy they receive through their employer. Generally, women have 25% less protection than our male clients.
However, 45% of women are either primary or equal earners in their homes, controlling an estimated $11 trillion in assets. In addition, more than 40% of women surveyed said they need additional coverage.1
The insurance gap exists for two main reasons. First, historical biases about the woman’s role in the household persist. Despite nearly half of women contributing as much or more financially than men, society labels them primarily as carers instead of earners. Unfortunately, this misconception leads many women to believe they don’t need much (or any) life insurance.
Second, 80% of women overestimate the cost of insurance, which means they may think they can’t afford it even if they believe they need the protection.1 However, purchasing term life insurance can be a budget-friendly way to continue to take care of their family should they pass away. For example, a healthy 45-year-old woman can get one million dollars in coverage over a 10-year term for roughly $57 per month.2 A healthy 35-year-old woman can get the same policy for about $28 a month3. As you can see, the younger you are when you buy life insurance coverage, the lower your premium can be.
Women can also protect their income if they become unable to work. They can get a long-term disability (LTD) policy for as little as one percent of their annual salary. At that rate, if they earn $100,000 per year, they’d pay about $83 per month for LTD insurance.
Women need insurance for many of the same reasons as their male counterparts. Insurance can be a way to protect a family’s wellbeing should something happen to one of the providers or caregivers.
If they become disabled, disability insurance will replace a percentage of their income so the household can keep paying its bills. If they die, life insurance will provide the beneficiaries with a windfall to cover funeral costs, mortgage payments, college tuition fees, and other essential expenses. Life insurance proceeds can also cover caregiving costs like daycare fees or nursing home bills. That way, children and elders can still receive the care they need without overburdening the remaining family members.
Closing the insurance gap starts with increased education and access. Improving financial literacy for women can help these earners better understand the benefits coverage can provide to their families if something happens to them. The insurance industry must communicate the value of life and disability insurance to women whether or not they’re the household breadwinner. With a better understanding of how financial products can help them protect their family, they may be more likely to buy coverage.
Women may also feel more comfortable purchasing policies from female financial professionals. According to the Bureau of Labor Statistics (BLS), about 49% of insurance sales professionals are women.4 As an industry, we may be able to reach more women by hiring additional female financial professionals.
Six out of 10 insured women feel financially secure, while only 40% of uninsured women feel the same.4 When it comes to closing the insurance gap for women, education, outreach, and access to the right financial products can help ensure that key earners and caregivers have the protection they need. We can help more women achieve peace of mind and financial security by connecting them with coverage that protects what they treasure most: their family.
1 https://news.missouristate.edu/2023/04/28/appreciating-the-value-of-women-as-caregivers/
2 45-year-old female, Select Preferred rating, New York Life Level Term for 10 years
3 35-year-old female, Select Preferred rating, New York Life Level Term for 10 years
4 https://www.bls.gov/cps/cpsaat11.htm
This article is provided for general informational purposes only. Neither New York Life Insurance Company, nor its agents, provides tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.
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