Why women need life insurance

Recent headlines and hot topic books are buzzing over the rise of women and the decline of men. The percentage of women currently in the workforce is at an all-time high, over 49%. That’s definitely a statistic we're celebrating, but when you look below the surface, you'll find something alarming: 43% of working women have no life insurance. When we polled our Shine Facebook viewers on this topic, 40% of the participants admitted they were uninsured too. So why is this a problem and what are some options? Personal finance expert and certified financial planner, Lauren Lyons Cole, stops by “The Shine” to talk about why women need to purchase life insurance and what policy options are available.


More on The Shine:  Check out yesterday's episode about how to take some stress out of cleaning.

Let’s start with the heart of the matter: women are out there in the workforce, they have the majority of advanced degrees, so why have women not thought about life insurance? Lauren points to the fact that about 100 years ago, women weren't even able to buy life insurance. The value that women were providing to the home wasn't considered worth insuring. Hard to imagine that reality now! But these days, Lauren says, we can actually put a dollar amount into the value we're providing; we know our annual salary, so we know what our family needs from us to continue living at our current lifestyle.

So why do women need life insurance? More or less, life insurance is a safety net. If a women is providing financial value to help take care of a family, if she can no longer provide that for whatever reason, she needs to make sure her family still has the income to stay afloat. And life insurance helps accomplish that goal.

In terms of policy options for women, as it stands, the average life insurance policy for women right now just covers about $129,800, which is 31% less than the average male life insurance policy. Lauren says this is nowhere near enough, (depending on the woman’s salary), so most financial experts recommend a policy that’s about seven to ten times your annual salary. For instance, a $500,000 policy for a woman who's roughly thirty years old and relatively healthy will run about $250-$300 for the year.

Even single, working women should purchase life insurance if they find themselves in one of the following circumstances. If you have a significant debt load (for instance maybe you're a lawyer and took out student loans for law school) or if you have aging parents that you're caring for, you should highly consider life insurance.

The same goes for stay-at-home moms. These women provide value – they may not be bringing in a specific dollar amount – but they provide tremendous support taking care of the kids, so what would happen to a family if the mom weren’t able to care for the family anymore?

Considering purchasing life insurance now?

Here are Lauren’s three tips to get started:

1 - Go to your Human Resources department to see if you may qualify for life insurance through work
2 - Search online through websites that allow you to compare term vs. life insurance quotes
3 – Ask your friends to recommend a life insurance agent they trust and set up a meeting with that person to walk you through the process, especially if you prefer a more hands-on approach

More on The Shine: Check out yesterday's episode on how to take the stress out of cleaning.