Females and the Life Insurance Gap

Over the past few years, I’ve noticed a trend when meeting with people to discuss their life insurance needs.  It looks something like this: a husband and wife sitting in our boardroom discussing how much life insurance the husband should have so that the wife is taken care of.  Sometimes there is a young child in the corner of the meeting room coloring on a piece of paper.

There’s really nothing WRONG with this picture, except for the fact that many times the conversation doesn’t continue much beyond the “worth” of the husband.  When analyzing a family’s need for life insurance, I stress that the wife – whether working inside or outside of the home – has as much of a place in that “worth” discussion as the husband.  Now statistics would say that the number of female’s purchasing life insurance on themselves is getting larger; but we still have a long way to go.

Why do many women undervalue themselves when it comes to deciphering their family’s financial picture?  Let’s take a look at some of the numbers:

• Women now make up the majority of college graduates
• In a 2013 Study by thePewResearchCenter, women are now the primary breadwinners in 40% of households with kids under the age of 18 (Interestingly enough, in households where women are the primary breadwinners, the entire household income is higher by about $2000 per year.)
• This year Salary.com published it’s valuation of the “worth” of a wife who works inside the home at over $110,000 per year – based on day care costs, errands, and household activities that would need to be replaced to keep a family running
• Almost 80% of single family homes are headed by a female
• Women who do own life insurance, have on average 31% less on themselves than their male counterparts do

This is why I consistently remind families that when making a decision on life insurance needs, it is important to consider both the husband and wife’s value to the family.

The good news is that many of the above numbers look a lot better now than they did 30 or even 20 years ago.  This means women and families are educating themselves and understand there is a need.

If you and your family are under or uninsured, please consider sitting down with your insurance advisor to complete a needs analysis.