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We’re over the Mad Men era. Along with being the primary caregivers in their households, women are also now key decision-makers. Nearly half of women (49%) are the primary breadwinners in their households and women control more than half of all personal wealth in the U.S. Today, let’s discuss women and financial differences. 

However, despite women rising in the workforce and their incomes growing, they still overall have less confidence with money, tend to put their careers on hold to help family, and have less life insurance coverage than men.

Financial Challenges for Women

Women seem to constantly be playing catch-up and this is because of a number of reasons:

  • Women are more likely to take career breaks for caregiving, such as raising children and/or caring for aging parents. Time away from the workforce can have significant financial implications such as:
    • Lost income
    • Lost employer benefits (e.g., health insurance, retirement benefits, etc.)
    • Potentially lower Social Security retirement benefit
    • Possibly a harder time finding a new job
  • Women generally earn less than men. This wage gap can significantly impact savings, retirement benefits, and pensions.
  • Women have longer life expectancies than men. A longer life expectancy has challenges such as:
    • Needing to stretch retirement dollars further
    • Higher potential for needing long-term care
    • Responsibility for disposition of the marital estate
  • Women tend to invest more conservatively which leads to:
    • Loss of purchasing power due to inflation
    • Inadequate retirement nest egg

Let’s take a deeper look at these challenges.

Loss of Income

It doesn’t matter if you work outside of the home or work as stay-at-home mom. Women need life insurance.

» Learn more: Why Women Need Life Insurance

Funds that pay for expenses such as childcare, bills, groceries, and college tuition need to be replaced if you were to die unexpectedly. Life insurance would mean the surviving parent could afford child care, extra help if needed, and be able to continue to pay the mortgage so as not being forced to uproot children.

Comparing Life Insurance Rates for Men and Women
Average Term Life Insurance Monthly Premiums for a Healthy Non-Smoking Individual
Age Face Amount 20-Year Term (Males) 20-Year Term (Females) 30-Year Term (Males) 30-Year Term (Females) 40-Year Term (Males) 40-Year Term (Females)
30 $100,000 $10 $9 $14 $13 $20 $16
$250,000 $14 $12 $20 $17 $29 $23
$500,000 $21 $18 $34 $28 $53 $39
$750,000 $28 $24 $46 $40 $76 $56
$1,000,000 $35 $21 $60 $49 $103 $73
40 $100,000 $12 $11 $19 $17 $28 $24
$250,000 $18 $16 $32 $26 $62 $49
$500,000 $29 $26 $54 $44 $115 $92
$750,000 $43 $37 $78 $62 $169 $135
$1,000,000 $53 $45 $102 $80 $223 $177
50 $100,000 $23 $20 $38 $31 N/A N/A
$250,000 $42 $32 $71 $54 N/A N/A
$500,000 $75 $56 $135 $100 N/A N/A
$750,000 $111 $82 $196 $145 N/A N/A
$1,000,000 $145 $105 $255 $186 N/A N/A

Women are grossly underinsured compared to men and there is no reason for this. The income you provide is just as essential to a family as the income men provide.

Because of this, disability insurance is another product to consider. If an illness or accident were to prevent the ability to perform job duties, disability income insurance would provide a benefit to cover expenses until you could get back to work.

» Calculate: Life insurance needs calculator

The Caregiver Burden

According to statistics shared on from the Family Caregiver Alliance, the majority of caregivers (65%) are women.

Not only do mothers work more (professional, child, and housework) on average than their male partners, but they also have the burden of caring for other family members when they need help. They may find themselves helping elderly parents who have health concerns or did not save enough money for their retirement, siblings that are in financial need, or their own adult children who have yet to become independent.

» Learn more: The Best Term Life Insurance for Caregivers: How to Protect Your Loved Ones

Again life insurance becomes a necessity. If you are supporting a loved one and you died, where would the funds come from to continue to provide that loved one’s same standard of care? Term life insurance can ensure your loved ones will be financially provided for if something happened to you and permanent life insurance even has the potential to give you the option to access cash if you need extra money.

Plan ahead now so you won’t be a burden to someone else if you need support. Investing in retirement accounts like your company-sponsored 401(k) or an IRA account will give you financial flexibility down the road. Buying long-term care insurance will also ensure you have funds if you need extra care as you age.

Chronic Illness and Care: Financial Concerns for Women Infographic

Image of infographic titled "Chronic Illness & Care, Financial Concerns for Women."

Buying long-term care insurance will also ensure you have funds if you need extra care as you age.

Want to see what you’d pay for life insurance?

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Outliving Savings

Funding Your Retirement

American women today are living to age 81 on average—and that number continues to rise. The typical American will retire at age 62. That’s 19 years of needing an income without working.

It makes sense that women are concerned with outliving their savings and financial freedom. The earlier you can start saving for retirement the better.

If your company offers matching contributions to a 401(k) take advantage of the full amount. For example, if your employer will match up to 4% of your paycheck it’s advisable that you then allocate at least 4% so you can, essentially, double your money for free. Increase your contribution annually whenever your budget allows.

In addition to contributing to a 401(k) plan, prepare for retirement by opening an IRA. IRAs can be set up so that an amount is automatically deducted from your checking or savings account and deposited in your IRA account.

» Compare: Term life insurance quotes

Planning for Long-Term Care

As mentioned before, long-term care insurance can also help make sure you don’t outlive your savings. If you have an LTC insurance policy, the benefit provided from that plan can go toward health expenses instead of needing to reach into your retirement savings. Another option would be to add a long-term care rider onto your life insurance policy. This way you still have life insurance coverage, but also have the option of receiving a portion of the benefit early if you need it.

If you are unsure on the best way to manage your 401(k) account, talk with your company’s human resources department. If you want to open an IRA, you can check with your local bank or even opt to go online. There are many online providers that can help you open and manage an IRA account.

Your Next Steps…

Women pay less for life insurance than men. Let’s take advantage of this. 

Get term life insurance quotes instantly—no need to even give up contact information to get pricing. More interested in permanent life insurance or a mix of both term and permanent? Read more about the different types of permanent life insurance products here: whole life insurance quotes. You can fill out a form to receive customized permanent life insurance quotes as well.

Take charge of your financial future today.

Note: Life insurance quotes used in this article accurate as of August 25, 2020. These are only estimates and your life insurance costs may be higher or lower. 

Photo credit to: StartupStockPhotos

About the writer

Headshot of Natasha Cornelius, a life insurance writer, for Quotacy, Inc.

Natasha Cornelius

Marketing Content Manager

Natasha is a writer and content editor at Quotacy. She is also co-host of Quotacy’s YouTube series. She can't get enough of life insurance and outside of work is also working toward her Chartered Life Underwriter designation. Connect with her on LinkedIn.