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How to reduce the life insurance gender gap



Our survey found that men with life insurance valued their lives financially almost 2 times more than women. Here’s what you can do about it.

Our survey on gender, roles and life insurance showed that there is a gender gap in life insurance, but what can be done about it?

Only 67% of women surveyed said they had life insurance, compared to 79% of men. Of those who had individual life insurance, women had an average coverage amount of $231,342, compared to men who had an average amount of $423,102. This means that men with life insurance valued their lives financially almost 2 times more than women with life insurance.

That doesn’t mean men think their lives are twice as valuable as women’s, of course. It just means that thanks to external factors, such as the gender pay gap and life insurance providers making people choose coverage based on income, men tend to have more life insurance than women.

The gender gap in life insurance becomes even more pronounced in households where the man is the primary earner and the woman is the primary caregiver. A stay-at-home mom might not consider taking out life insurance, for example, but that means her family has to figure out how to cover the high costs of childcare if she were to pass away.

How can we solve the life insurance gender gap and help families get the life insurance coverage they need?

It may be time for men and women to stop thinking of life insurance as a way to cover lost income and start thinking of it as a way to provide future financial stability. Here’s how you can help close the life insurance gender gap.

In this article:

Understand what causes the life insurance gender gap

Why is there a significant gap in life insurance coverage between men and women? “There are a number of factors at play here, starting with conventional life insurance wisdom, which says you should have coverage that’s five to 10 times your income,” explains Brittney Burgett, Haven Life’s director of marketing and communications. “It’s problematic when you look at coverage for a stay-at-home parent, which the majority of [survey] the defendants agreed that they should have life insurance.”

Burgett spearheaded the Gender, Roles and Life Insurance Survey, and hopes it will help parents make better decisions about their life insurance needs. “One of the fundamental problems with life insurance is that there are still some outdated views that life insurance is only needed for the primary income earner in the family,” she says.

Brendan Willmann, a CERTIFIED FINANCIAL PLANNER™ professional at Granada Wealth Management, agrees. “If a spouse is a sole carer, the traditional advice is to consider relatively low coverage. But the financial contribution of a stay-at-home parent is often underestimated.”

Both parties play a key role in ensuring the financial stability of the home, whether they are earning an income or providing childcare. But traditional life insurance advice, which suggests men and women buy coverage in proportion to their income, doesn’t recognize that reality.

Consider life insurance coverage for both parties

If you want to solve the life insurance gender gap, consider taking out life insurance coverage for both parties. When only one half of a couple gets life insurance through an employer, for example, it’s time to start looking at other coverage options.

“Many people rely on employer-provided life insurance, which is usually not enough,” Burgett explains. Because employer-provided insurance is often based on income, the gender wage gap feeds into the life insurance gender gap—and the coverage gap widens in families where men are the primary earners and women are the primary caregivers.

Men and women can address this problem by purchasing their own life insurance policies to bridge the gap and ensure that their family is fully covered.

“I suggest that couples consider a higher benefit amount for a shorter period of time,” says Willmann. “This allows for reasonable premiums while providing adequate protection for the breadwinner in the event that their child’s caregiver passes away unexpectedly.”

Betty Wang, a CFP® professional and founder of BW Financial Planning, offers similar advice. “I recommend the same dollar amount for the breadwinner and the caregiver, especially if the couple has children or people who are financially dependent on them. If the caregiver were to pass away, the breadwinner would either have to take on the caregiving responsibilities (which can take away the income) or hire qualified help.

Burgett agrees. “That’s the main thing I would love to see more of come out of doing this research,” she explains. “When you look at the amount of life insurance, you need less as a multiplier of your salary, but really recognizes the equal impact that both parents have on the household regardless of what their” annual income is.

Make sure you have the right coverage for your family

To solve the life insurance gender gap, think of life insurance coverage as a way to cover a family’s financial needs rather than an individual’s income.

When buying life insurance, a life insurance calculator can help you determine the level of coverage you need to protect your family and cover similar financial obligations, such as shared debt from a mortgage, car loan or credit card.

This calculator works even if you’re a stay-at-home parent. For example, if you put your income at $0, the Haven Life calculator wouldn’t assume you didn’t need life insurance. “It would look at the number of children, how old your children are, does your spouse work, how much does your spouse earn,” Burgett explains, “to give you an estimate based on the financial obligations you have and what your family has. The structure looks out.”

In addition to consulting a life insurance calculator, couples may also wonder what new expenses may arise after one partner moves on. “Think about what would happen to your family if there was only one parent,” suggests Burgett. “How will childcare work?”

Because life insurance is designed to protect the entire family, calculating the true cost of each member’s work, whether it’s done inside or outside the home, can help you determine how much coverage you need.

Once we begin to recognize that unpaid care has just as much value as paid employment—and yes, that includes financial value—we begin to close the gender gap in life insurance. We can choose to solve the life insurance gender gap on our own, one family at a time.

Our editorial policy

Haven Life is a customer-centric life insurance agency supported and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe that navigating life insurance decisions, your personal finances and overall well-being can be refreshingly simple.

Our editorial policy

Haven Life is a customer-centric life insurance agency supported and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe that navigating life insurance decisions, your personal finances and overall well-being can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less difficult if they fit your situation.

Haven Life is not authorized to provide tax, legal or investment advice. This material is not intended to provide and should not be used for tax, legal or investment advice. Individuals are encouraged to obtain advice from their own tax or legal advisor.

Our disclosures

Haven Term is a term life insurance policy (DTC and ICC17DTC in some states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in some states, including NC) issued by CM Life Insurance Company, Enfield, CT 06082. Police and driver form numbers and features may vary by state and may not be available in all states. Our agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by AM Best Company as A++ (Superior; Top category of 15). The rating is valid from 1 April 2020 and is subject to change. MassMutual has received different ratings from other credit rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The driver is not available in all states and is subject to change at any time. Neither Haven Life nor MassMutual is responsible for the provision of the benefits and services made available under the Plus Rider, which are provided by third party providers (partners). For more information about Haven Life Plus, visit: https://havenlife.com/plus

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