Best life insurance for women

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Women may have different considerations when it comes to life insurance, but both sexes have similar views about death. Haven Life’s survey found that most men and women both believe their deaths would have a “substantial impact” on their families. Men and women also agreed that losing a partner who is the primary caregiver or primary earner would have an equally negative impact on family life.

While men and women seem to agree about the effect of a loss on the family unit, there certainly is a gender gap in life insurance purchases. Roughly 67% of women have life insurance compared to 79% of men. Furthermore, women’s goals for how much life insurance would be ideal vs. the actual amount they invested in coverage was roughly half the amount of men’s.

Abby Reddy, CMO and co-founder of Quotacy, finds that “57% of our clients are men and 43% are women.” According to Reddy, “Many wives sign their husbands up for life insurance and add child riders to cover kids, but don’t purchase life insurance on themselves. This
gender gap in insurance coverage is something the industry has grappled with for years.”

Life insurance for women

Based on the statistics provided by Haven Life and Quotacy, women sell themselves short when it comes to coverage. Women own an average life insurance amount of $231,342, compared to a male’s $423,102.

Fears about the cost of coverage may be one of the top reasons. Allison Kade, millennial money expert at Fabric, says, “When looking to buy life insurance, many women we’ve spoken to are concerned about affordability. For coverage, a big number like $500K could sound scary, but term life might not cost as much as you think. For example, based on a quote through Fabric for a 30-year-old female in excellent health located in Texas, it would only cost $24.78 per month for a $500K, 20-year policy.”

Using life insurance to leave loved ones a financial cushion is sensible, especially since many women fulfill both breadwinner and caregiver roles. But there are other reasons why more women should consider prioritizing life insurance. For instance, the right kind of life insurance coverage can level the gender inequality gap during a divorce.

Lauren Blair, a lawyer and insurance expert with FreeAdvice.com, has over 25 years of family law experience. She says, “Given the income disparities that continue to exist between men and women, it is important to make sure that the wife receives an equitable division of property and assets in a divorce.” A life insurance policy that is appropriately structured can be a beneficial, divisible asset.

A term life insurance policy has no cash value. “Term life insurance typically will not constitute a financial asset that has to be divided between spouses,” said Blair. Consequently, a term life policy is awarded in full to the owner.

A permanent life insurance policy might be a better solution. It builds cash value with every premium payment and is treated as an asset during a divorce. Blair explains, “In common law and community property states, permanent life insurance policies acquired during the marriage are generally treated as marital property and would be subject to equitable or equal division, depending on the divorce laws of the state.”

Regardless of whether you are buying life insurance to provide for your dependents should you pass or as a wealth and asset planning tool, life insurance has an important place in a woman’s financial plan.

Best life insurance companies for women

In the U.S., all states except Montana allow insurance companies to use gender as a basis for determining rates for all or some insurance policies. Since women tend to live longer and have fewer health risks than males, life insurance is generally cheaper for women. Nevertheless, Kade of Fabric Insurance affirms that: “Statistically, women tend to live longer and rates are based on actuarial data. That said, many other factors contribute to the final cost of a policy, including lifestyle, health, personal details and more.”

Everyone’s life insurance needs are different based on their circumstances, but we’ve done a little research to try and find some companies that may be a better fit for women who are looking for certain things in a life insurance policy:

Company Best for
Protective Life Insurance Best for pregnant women
State Farm Best for fast coverage with no medical check
Prudential Best for high limits
Northwestern Mutual Best for overall financial planning
Principal Financial Best for diabetics

Protective

Protective Life Insurance might be a good option for pregnant women who would like to get coverage. Applying earlier in the pregnancy increases the odds of approval. If you plan on naming your infant as a beneficiary, be sure to appoint a guardian, as minor beneficiaries cannot receive a death benefit payout. If there is no guardian appointed, the courts will intervene to appoint one, which can be a long, expensive process.

Mothers-to-be should also consider adding a child rider to their policy once the baby is born. Protective’s child riders are available for infants as young as 15 days old and provide a death benefit should your child pass away. The rider may be convertible to a permanent policy, regardless of your child’s health, which could offer an affordable way to insure your child for life while they are young and premiums are low.

State Farm

State Farm provides quick and easy online quotes for life insurance. Women looking for an instant-approval life insurance policy that does not require a medical exam should consider visiting the website to get a LifeRate quote.

The process takes less than 10 minutes and guides you with tools and calculators, such as the State Farm Calculate My Life tool that helps you figure out how much life insurance you will need.

Prudential

If you are a high earner, calculate the amount of life insurance you might need by multiplying your income by five or ten years. If you end up with a large number, Prudential may be a good fit for you, as it allows policyholders to assign a benefit as large as $10 million. The company also offers three different types of universal life insurance that provide flexible options to build savings.

You will not have to worry about whether the funds will be there when your beneficiaries need it — Prudential has earned an A+ (Superior) in financial stability from the credit reporting agency A.M. Best.

Northwestern Mutual

Women who see life insurance as an essential component of their estate and financial planning should consider checking out Northwestern Mutual.

Northwestern Mutual’s dividend-earning whole and universal life policies offer some great savings options, and since it’s a mutual company, policyholders are eligible for dividends. In addition, you will have access to a certified financial planner that can help you develop a financial plan that evolves as your policy’s cash value grows.

Principal Financial

About 15 million women in the U.S. are diagnosed with diabetes. A pre-existing medical condition makes it more difficult to buy life insurance, but Principal Financial is willing to work with women who suffer from the disease.

Principal underwrites individuals with adult-onset/Type 2 diabetes. Unlike many insurance companies, an applicant with diabetes may still receive standard, preferential pricing or second-tier premiums.

Types of life insurance for women

Life insurance falls into two main categories: permanent and term life. While term is the cheaper option of the two and easier to obtain, it lacks long-term benefits due to its temporary period of 10 to 30 years. Permanent policies may be more expensive, but offer some features that may be better for women:

  • No expiration: As long as you pay your premiums and keep your policy up to date, your coverage will not lapse. This aspect is beneficial since women typically live longer than men.
  • Has a death benefit and cash value: The death benefit is the amount you leave to your beneficiaries. The cash value amount is similar to an investment that you can access and borrow from.
  • You have options: The cash value account can accrue interest similar to a savings account or can be invested in stocks or an index fund. It all depends on your risk tolerance.

Women who are shopping for a life insurance policy may want to speak with a licensed insurance agent or financial planner to decide which of these types of whole, or permanent, policies might be right for them:

  • Whole life insurance: The premiums are fixed, and the cash value of this type of policy earns interest similar to a savings account.
  • Universal life insurance: The premiums are flexible, and the cash value earns interest similar to a savings account.
  • Variable universal life insurance (VUL): The premiums are flexible, and the cash value can be invested in stocks, bonds or mutual funds.

Everyone’s financial goals are different, and for some women, a term policy with cheaper premiums may be the better option. In addition to speaking with a licensed expert, it’s also a good idea to do a little research on life insurance companies and compare quotes to see what’s out there.

Frequently asked questions

What is the best life insurance company for women?

There are many life insurance companies to choose from, and everyone’s needs are different. Speak with a licensed insurance agent and shop around to compare rates and policy features to determine what is best for you.

Can a pregnant woman get life insurance?

Women can buy life insurance while pregnant, but there are a few things to consider. It’s usually a better idea to apply for a policy early in the pregnancy. Most insurance underwriters will not charge higher premiums if the changes to your body stay within normal parameters for a pregnant woman and if you do not have pre-existing conditions or a history of complicated pregnancies. Speak with a licensed insurance agent to learn more about the best way to approach life insurance when pregnant.

Can I name my unborn child as a beneficiary on my life insurance?

Many insurance companies will require you to wait until your infant is 15 days or older. When you name your child as a beneficiary, be sure to appoint a trustworthy guardian to manage the death benefit until the child is of legal age. If you do not, the courts will appoint one on your behalf, which could be expensive and time-consuming.

Written by
Cynthia Paez Bowman
Personal Finance Contributor
Cynthia Paez Bowman is a finance and business journalist who has been featured in Bankrate, Business Jet Traveler, MSN, CheatSheet.com, Freshome.com and TheSimpleDollar.com. She regularly travels to Africa and the Middle East to consult with women’s NGOs about small business development and works with select startups and women-owned businesses to provide growth and visibility.