By Diana Palmieri
With the majority of households relying on dual incomes these days, you would think that both spouses would have life insurance coverage. Millions of families rely mainly on the male’s policy, failing to think about the financial devastation of losing the female’s income, too.
Some pretty eye-opening stats about women in our society:
- More than half of the labor force is comprised of women.
- Nearly four in 10 mothers are the primary breadwinners for their family.
- Women make up 51 percent of the population and represent a majority of college graduates.
(source: American Progress.org – Shriver Report “A Woman’s Nation Changes Everything”)
And yet 43% of women have no life insurance coverage!
Life insurance is used primarily for income replacement. While we all know it can’t replace a person, it replaces some or all of the income if someone dies. The benefit most likely will be used to pay off a mortgage, help with day-to-day expenses, and cover final expenses such as burial costs.
A stay-at-home mom is invaluable to a household. Considering all the work she does, has a thought been given to an annual salary? According to www.salary.com, it’s about $112,000 annually, with moms juggling about 95 hours of work. Of course, everyone’s situation is different, but the point here is, what would happen if the unthinkable happened? How would the household survive financially? A lump sum payment could help with day care costs, housekeeping costs, and transportation. Keep in mind the surviving spouse will most likely continue working, and having the money to help with those expenses will be very much needed.
Older women who are at a different stage of their lives such as a widow or empty nester also must consider some points. Perhaps the widow has done very well financially and wants to ensure her beneficiaries aren’t burdened with estate taxes and burial expenses. Think about an empty nester who may become terminally ill and has accumulated a hefty amount of medical bills. She does not want her husband or children burdened with the medical or final expenses of her life. Life insurance put in place years before will be very useful in alleviating some of these financial needs.
Social Security survivor benefits are a consideration. But keep in mind that these things take time to put in place, and benefits may not be received for a period of time. And, more importantly, it may not be enough.
We unfortunately do not think of things like this until it’s too late. Or we think, “It won’t happen to me.” The good news is that life insurance for women is usually cheaper than for men. A healthy 40-year-old nonsmoking female can get a 30-year level-term policy for $250,000 for about $29 a month (quote based on a preferred no tobacco rating in New York State with a top insurer – your premium may be higher or lower and is based on insured’s health and underwriting criteria). A group plan offered through an employer can be considered too, as there may be a provision to add dependent coverage. Keep in mind that may be a bit more expensive than insurance with an outside insurer. There usually is no medical exam involved with group term like there is with an outside insurer.
Have the conversation today, and consult a qualified insurance agent or ask your financial advisor for help.
Diana Palmieri is dually registered with Vanderbilt Securities LLC and H Beck Inc., which are unaffiliated. Securities offered through Vanderbilt Securities LLC, member SIPC/FINRA/MSRB.
