Best life insurance for women

Life insurance for women

For many women, a robust life insurance policy provides an essential layer of financial protection for their loved ones. Whether a woman is the family breadwinner or a stay-at-home partner and mom, her loss may cause budgetary challenges that can be mitigated with the right life insurance.

There are a number of reasons for women to consider a life insurance policy. Perhaps most important for many is the need to provide financial protection for minor children. This need can be even more vital in a single-parent household. Premiums for women are often less than those for men since women statistically live longer than men, making insurance a favorable addition to a strategic financial plan.

Many women also care for elderly parents, and here, too, life insurance offers benefits by providing the means for adequate health care and other protection for older adults if their daughter should pass away.

Even a woman who is a stay-at-home mom provides services to her family that can be costly. One recent estimate placed the value of a stay-at-home mother's services at roughly $184,000 a year—a considerable amount to replace if she were no longer in the picture.

Women also tend to save less than men on average, meaning they are likely to leave less of a nest egg for their loved ones. A study by the American Association of University Women (AAUW) indicated that women in the workforce make only 84 cents to every dollar earned by men, giving them fewer resources to save for the future. A life insurance policy can help overcome that lack of savings.

Best life insurance companies for women

Although there is no single company that always writes the best policies for everyone, Bankrate's insurance editorial team has done the research to determine the insurers that consistently provide excellent insurance products geared toward women. We looked at average rates, policy options, available riders and more to determine the companies that may be a good fit for women. One strategy you may want to consider for saving money on your policy is asking for quotes from several insurers for the same levels and types of coverage, to see who offers you the most affordable premium.

Types of life insurance for women

Life insurance falls into two main categories: term and permanent. The right policy type for you depends on your individual needs, goals and circumstances. Buying life insurance as a woman may bring unique questions, so talking to an agent is often the best way to land on the right policy. However, learning about each type of policy could also help you choose the one that best fits your needs (and your budget).

Term life insurance

Term life insurance is coverage that lasts a specific number of years. Common options are policies lasting 10, 20 or 30 years. Term can be a smart choice if you need coverage for a specific period—such as while your children are young—but know that you likely won't need coverage at a future date. Your death benefit pays out to your beneficiaries if you pass away at any point during the policy's term. If your need for coverage changes, many insurers will allow you to convert your term policy to a more permanent type of insurance if necessary. Unlike permanent insurance, term policies do not have a cash value and are usually simpler and less expensive than permanent forms of coverage.

Many women opt to carry term life insurance while their children are young. Doing so could provide peace of mind that your beneficiaries will have financial assistance if you happen to pass prematurely. However, term policies may not be the best choice for every woman, so considering the pros and cons could be essential when shopping for new life insurance.

Permanent life insurance

Unlike term life insurance, permanent life insurance is intended to cover you for your entire life (as long as you pay your premiums). Since the insurance company is guaranteed to pay out a death benefit, permanent life insurance usually costs 10 to 15 times more than term.

Along with a death benefit, most permanent life insurance policies come with a cash value benefit. Once the cash value of your policy has had enough time to accrue, you may be able to withdraw a portion of it, borrow against it as a loan or use it to pay your life insurance premium. Although this cash benefit accrues slowly (and some types of policies aren’t guaranteed to accrue at all), this benefit could appeal to women who’d like to use their life insurance policy as a small safety net. Keep in mind, however, that any money that is borrowed and not paid back will be deducted from your death benefit.

There are a few different kinds of life insurance that fall under the umbrella of permanent life insurance, and the policy you choose can determine how you pay your premium and how the cash value portion of your policy accrues. These types include:

• Whole life insurance: The premiums are fixed, and the cash value of this type of policy earns interest.
• Universal life insurance: The premiums are flexible, and the cash value earns interest.
• Variable universal life insurance: The premiums are flexible, and the cash value can be invested in stocks, bonds or mutual funds.
• Guaranteed universal life insurance: This is a low-risk policy with a fixed premium for your entire life. While it doesn’t accumulate much cash value, it’s a good option if you need more affordable permanent coverage than whole life insurance.

Permanent life insurance can be more complicated than term, so you might want to meet with a licensed agent or certified financial planner to get a full view of what type of policy can best meet your needs.

Frequently asked questions