Understanding the Gender Gap Between Women and Life Insurance

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The Gender Gap in Life Insurance

When it comes to gender disparities between men and women, pay isn’t the only area where women fall short. As it turns out, there’s a gender gap in life insurance coverage, too. For whatever reason, men tend to carry life insurance policies that are worth almost twice as much as women.1

In fact, according to a 2020 study from the Life Insurance and Market Research Association2 (LIMRA), only 47 percent of women have life insurance at all. Compare that with the nearly 58 percent of men who own life insurance policies. 
Almost everyone needs life insurance, regardless of gender and profession. But why is the gender gap so pronounced in life insurance coverage, and what can women do to fix it?

Why is there a gender gap in life insurance?

The gender gap in life insurance tends to boil down to economics. According to that same LIMRA study above, the following factors lead to lower policy limits and instances of life insurance purchases by or for women:

  • Lower earnings: The pay gap for women still exists.3 For every dollar a man earns, a woman doing the same job with the same general expectations can expect to earn 77 cents. That gap may seem minuscule, but it adds up. Those lower earnings can translate to the idea that a woman may not need to purchase as much life insurance to protect against the loss of her income.
  • Undervalued unpaid labor: Full-time caregivers contribute much to the household and to their families’ financial wellbeing, but some caregivers undervalue how much their contributions truly matter. Stay-at-home spouses sacrifice the earnings they would make at an office job or a job that took them out of the home. If they were to stop doing that work, the economic impact would be noticeable and immediate, but because they aren’t financially compensated, many stay-at-home spouses don’t consider purchasing life insurance.
  • Reduced financial literacy: Another driver of low life insurance adoption rates among women is reduced confidence when it comes to financial decision-making. They tend to perform more poorly than males on financial literacy tests.4

    What doesn’t help is that life insurance as a financial product is often confusing or easily misunderstood. While most working women know their families rely on their paychecks and that said income needs protection via life insurance, they may not know that group life insurance coverage offered through work is often insufficient.

    Still, others may not understand that life insurance can help pay off outstanding debts like auto loans, student loan debt or funeral expenses in case of their untimely death.

How to Close the Gender Gap in Life Insurance

With so many factors influencing the gender gap in life insurance, how do we close it? Education plays a major part, but what does that look like? It starts with helping women understand the life insurance options available to them, as well as the pros and cons of buying each type.

Term Life Insurance

Term life insurance is among the most affordable life insurance options because it offers lower premiums than other life insurance policies. When buying this kind of policy, you choose the amount of coverage you desire and the length of time you want that policy to be in effect (the term). Most people purchase 10-, 15-, 20-, or 30-year term life insurance policies.

Once the term expires, you will need to either convert it to a whole life policy at a significant expense or purchase a new term life policy.

Whole Life Insurance

Whole life insurance is more expensive than term life insurance. This life insurance policy offers lifetime coverage and level-set premiums that never change for the duration of the policy. In addition to the death benefit, many whole life insurance policies offer a cash value that a person can borrow against and use as a type of savings account. This cash value is a certain percentage of each premium.

Let SelectQuote Help Find the Right Life Insurance For You

The life insurance gender gap is a major issue for many women, but it doesn’t have to be. If you have questions about providing financial peace of mind for your family, SelectQuote can help. Our team of licensed insurance agents specialize in finding life insurance policies that can meet your needs and are with you every step of the way to answer your questions.

We use proprietary technology to shop dozens of highly-rated carriers quickly on your behalf, saving you time and money so you can focus on what truly matters. Let us shop for your life insurance coverage and find the right policy for you in a matter of minutes.

1 https://havenlife.com/blog/life-insurance-statistics-2019-men-and-women/

2 https://www.waepa.org/resources/women-carry-less-life-insurance-than-men/ 

3 https://blog.dol.gov/2022/03/15/connecting-the-dots-womens-work-and-the-wage-gap 

4 https://www.sciencedirect.com/science/article/pii/S0167268121004455

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