Let's face it-- life insurance does not get a lot of attention in our day to day lives. It requires us to address a subject that many prefer to avoid--our mortality. We don’t ignore our health---as women, most of us get annual mammograms and cancer screenings. We don’t shy away from contributing to retirement plans. Why then, do we still skirt this issue of life insurance? It’s pretty straightforward and definitely necessary for building a sound financial plan, and it's something that shouldn't be ignored. Let’s pause for moment and I’ll break this down for you in a few easy steps:
Not so long ago, the contributions and wages of women were not frequently taken into consideration with regard to income replacement and financial planning. Fast forward a few short years and incomes and financial contributions to households of women have increased dramatically (sadly, still not on pace with men’s). Whether the primary breadwinner for her family, a single working parent, household CEO, or a combination of these, women need life insurance more than ever before.
Key points to consider:
- Most women are under-insured when it comes to life insurance. The policy you may have through your employer is likely 1 or 2 times your salary. Experts estimate that most of us need 7-10 times salary to be fully covered.
- Stay-at-home moms have a huge financial value to the household and need coverage. Think about the dollar value of what you do in the home. Would someone else provide this work for free if you were no longer around?
- Women’s life insurance rates are typically lower than men’s, making a policy an easy fit into even the smallest of budgets.
Let's get started!
Evaluate your situation
Lay it all out. How much income is generated in your household, whether you are single or partnered up? How much debt do you carry? It’s important to start with a baseline. Be honest with yourself as this may be the first and last time you go through this exercise, though hopefully not!
What’s the Plan?
What are your short term and long-term goals? Do you have (or anticipate having) children that will need a college education? Do you have a mortgage that you contribute to? Do you help parents or children with expenses? Does your paycheck go towards day care and household expenses? If you were to pass away, how would these expenses be covered? The answers to the above should help you determine how much coverage you need.
If you think that you are under-insured, chances are good that you are! Don’t let this stress you out. Work with an insurance advisor to help you start the insurance application process. There typically is no cost to obtaining a general quote or cost for coverage you are seeking. There is also no pressure to buy. Do note though, the longer you wait to make this decision, the more costly a policy will become. With increased age, comes increased premium. I’m relatively healthy (not a CrossFit queen though!) and I purchased a term life insurance policy in my mid-thirties with a benefit amount of several hundred thousand dollars and the yearly payment was and still is less than a decent pair of heels!
Review as Life Changes (because it will!)
Taking the first step to getting a policy in place is a great one. We all know that life changes (and pandemics do happen!). When you experience these events (buying a home, getting married, getting divorced, having a child, etc.), it is likely time to re-evaluate your needs for life insurance.
As women, we sometimes find ourselves lacking self-confidence to take action when most needed. Let’s step up our game ---protect yourself and your loved ones. You won’t regret it.
Kate Diffenderfer | Director at Raffa
This article was originally published in the Career Berry Newsletter
There’s so much more to employee benefits than policies and premiums. A great benefits broker will make sure you, your employees, and your business are protected. Is your agent looking out for you?
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