According to the Life and Health Foundation for Education (LIFE), 64 percent of women have no life insurance and those who do have about half as much coverage as their male counterparts. Women’s contributions to their families are considerable from extra income to childcare.
Regardless of your age, financial or familial situation, you likely need life insurance to help preserve your family’s financial future and ensure your debts and funeral costs don’t burden your loved ones.
Married Without Children
Your husband likely depends on your income to some extent. The life insurance you purchase covers funeral costs and allows time for your spouse to cope with the loss and get back on his feet.
A Single Mom
As the sole wage earner and guardian, your need for coverage probably exceeds most. However, according to LIFE, almost four in 10 single parents are without any life insurance. Many single moms are strapped for cash and think they can’t afford the additional expense. However, a healthy 25-year-old woman can pay as little as $9.00 a month for a $200,000 policy. That’s less than a 25-year-old man would pay. Even if you are slightly older (in your forties), you can still get an adequate policy for around $15.00 a month.
A Stay-At-Home Mom
Your importance as a stay-at-home mom is often undervalued by society. So you may feel it isn’t necessary to have life insurance because you don’t contribute monetarily. However, if you were no longer able to care for your children and your home, your husband would have to hire a person to take over those responsibilities or work fewer hours and tackle the duties himself. A life insurance policy helps your family to maintain its quality of life in your absence.
An Empty Nester
College is a huge expense that often requires dual incomes. If you passed away unexpectedly, your husband might be forced to use up his retirement savings to continue helping the kids pay for school. Or, maybe your children would have to alter their plans to adjust to the financial changes. A life insurance policy makes up for your lost income, helping your family to continue on financially unfazed.
A Single Lady
Being single doesn’t mean you are without responsibilities. A life insurance policy helps covers funeral expenses as well as any outstanding debts and loans so they aren’t passed on to your parents or siblings.
Types of Life Insurance
Term Life Insurance: Term life insurance is more flexible and less expensive than permanent. It’s best suited for younger families with several dependents, but without the financial means to pay the higher premiums of permanent whole or universal policies. This type of life insurance last only the number of years you elect. However if you choose this term life insurance, make sure it’s annual renewable or convertible, otherwise it can become quite expensive.
- Level Term: Premiums and coverage are fixed over a certain time period.
- Increasing/Decreasing Term: While premiums stay the same, the amount of coverage increases or decreases over a designated amount of time.
- Renewable Term: Your term life insurance inevitably increases as you age, but your health is less predictable. A renewable term policy allows you to renew your policy without another medical examination.
- Convertible Term: This type of policy works well if you are planning to buy permanent life insurance in the future. It allows you to convert your term policy into a permanent one after a designated amount of time.
- Group Term: This insurance is usually purchased by an employer and covers several people, so the premiums may be reduced.
Permanent (Cash Value) Life Insurance: The premiums for permanent life insurance are five to ten times as much as for term life insurance. Permanent life insurance usually covers you for your lifetime and often offers a cash value-you can actually accrue money throughout the life of your policy.
- Traditional Whole Life: If you pay the premiums, this policy won’t expire. Many whole life policies have a cash value. This type of life insurance is intended to cover the higher cost of your premiums as you age.
- Universal Life Insurance: This type of life insurance is the most flexible. As your financial needs change, so can your premiums. As with whole life, universal life has a cash value feature in which part of your premium payments are placed. Once a substantial amount has amassed, you can use all or part of this amount for your future premium payments. However, once the money get used up, you have to begin paying again or risk losing your life insurance.
- Variable Life Insurance: With this type of policy, you can invest in stocks, bonds and mutual funds. Your money grows more quickly than with whole or universal policies, but there is more risk. However, many variable policies guarantee your death benefit won’t fall below a minimum level.
- Variable Universal Life Insurance: This type of life insurance combines the theory of the universal policy and the variable policy. It collects your money to be invested or used to pay future premiums.
Not knowing how your family members would cope without you is difficult enough. At least you can help ensure their futures are financially sound.