Why women talk themselves out of the life insurance they want/need?
The stats are in for women and life insurance. 44% of women have no life insurance. 60% of households are dual-income households. Nearly 4 in 10 mothers are primary breadwinners for their families. 5.2 million women are stay at home moms. Women earned 59.1% of degrees in North America. More than one in three women believes they do not have enough life insurance. 30% of women are out-earning their husbands, but wives’ life insurance ownership has not increased with their income. Salary.com calculated that the salary of a mother should be $162,581. 80% of consumers misjudge the cost of term life insurance.
Welcome to my new series on Life Insurance For Women. In the introduction, I mentioned the reasons why women need insurance and how it empowers you.
I am going to interview Chad from GoLife insurance https://golife.ca/fourcolumns on the following topics:
- Women are being overcharged, a lot, for mortgage insurance – what you need to know!
- Why women talk themselves out of the life insurance they want/need?
- How to prepare for baby- 3 pieces to financial protection (will, mat leave savings, life insurance).
- Is underwriting for women different?
In this second interview, we will talk about why women talk themselves out of the life insurance they want/need?
What percentage of women don’t own life insurance?
Over 40% of women have no life insurance coverage and of those that do have coverage, they own 25% less than men. Most households are dual income, and with more women being the primary income earner (30% are out-earning their husbands), life insurance ownership for women has not kept pace. Women place higher importance of owning life insurance than men but the insurance industry has not adapted to giving women access to quality advice and products.
The fear of being overinsured is powerful but how do women talk themselves out of the protection they need?
Financial behavior and psychology are fascinating and when it comes to life insurance there are 3 main reasons:
- Underestimate their financial value
- Convince themselves that they will adapt (ie. work more, move, adjust lifestyle)
- Procrastinate and use “other” financial priorities as a reason to delay
Are there differences for stay-at-home mom’s vs. “working” mom’s?
Mom’s are worth a lot of financial value and just because it’s not reported on their tax return doesn’t mean it isn’t a significant number. Depending on which study you see the financial value of a stay at home parent ranges between $50,000-$120,000. Life insurance is replacement insurance. If there is financial value then getting good life insurance should be considered.
Why can our desire to make the “best” decision actually stop us from making a good one?
The fear of making a mistake is a powerful motivator that stops many women from getting life insurance. We want to get the best life insurance and make a good decision, so it can be easy to delay or delegate the decision. Delegation is vital to survival when juggling career, kids, self, friends, family, finances, food and more. Though men view risk and death differently than most women, leaving many with less coverage. Striving to make the perfect decision leaves many families with financial risk and vulnerability. Life insurance is much more of an “art” than science and having some coverage in place is always better than having none.
Why is it important for women to take control of getting life insurance?
Delegation is a critical part of a successful relationship and part of that delegation is making financial decisions. Life insurance is often not the most interesting topic but very necessary, so we delegate the decision to our partner and they don’t want to deal with it either, so it gets pushed down the priority list or forgotten. So we end in a place where both parties say “we need life insurance” but don’t find the time to get it done. Men and women also approach life insurance from different perspectives, generally, women do a better job and one reason why women are over 65% of GoLife applications. That’s why it is important that women take control of the process to ensure the right financial protection is in place.
Are women getting access to the right advice?
The life insurance industry has done a poor job of educating Canadians and especially empowering women to have confidence in making a life insurance decision. Generally, women are much better at understanding risk management than men but women often defer to their partners about decisions about life insurance. Determining how much life insurance to get is straight forward, eliminate debts and protect income. For most women that means 8-12 times annual income, meaning for many Canadians that’s about $500-$1.2 million of life insurance coverage.
What’s the #1 barrier for women to get started?
Over 80% of people misjudge the cost of life insurance, hence putting up an “invisible” barrier from the start. This misinformation leads to women to be convinced that they cannot afford the best life insurance. Thinking that good life insurance will cost a lot, individuals will also purposely low ball their need for life insurance, in the hope of a lower premium. After realizing term life insurance is more affordable than expected individuals often change the amount applied for to match their actual needs.
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With the amount of women being the breadwinners these days its important more than ever to make sure they are properly insured with the correct level of life insurance. It really doesn’t cost a lot to be insured but I know many women who don’t think to do so. There is a misconception that it’s a high monthly cost but why not be covered just in case? Seems to be a no brainer if you ask me. My wife and I are both insured since the month we were married.
Very informative and educative post about life insurance. Now I know better and will work towards that getting a life insurance.
such an informative post about life insurance. something that we should all have.
It’s quite surprising to see the statistics that 44% of women have no life insurance. They should be definitely educated about the life insurance. I don’t know what’s stopping them to take insurance for themselves which is so very important.
I feel like Canadians in general (men and women) aren’t given the right information to make informed decisions when it comes to life insurance. Unfortunately, we often learn about it after situations have changed making it even more challenging (or more expensive) such as the diagnosis of a serious disease or illness.
Sounds some interesting and useful reasons to go for life insurance. Thanks for sharing these nice tips.
I think we women have a tendency to underestimate us and do not make ourselves the priority. thank you so much for this post, it totally makes me more aware of the issue and how to solve it.
Not only women, I think everybody should have their own life insurance for better preparation of their future living. Tho some of your statistics are quite shocking to me.
My husband and I were just having a discussion about life insurance recently, because we’re getting a bit older. He’s 36 and his father passed at a pretty young age, so that is always something in the back of my mind. So we had the ‘ok, you’re getting closer to 40 and we should really be thinking about this stuff’ discussion. I honestly never really think about life insurance for myself. I don’t even like going to the doctor, so that kind of thing isn’t really a consideration. But part of that is how easy it is for women to put their own care on the back burner to take care of everyone else. Husband, kids, aging parents, working. All the other stuff that is usually deemed more important. It is so easy to disregard the need for life insurance. I like how you talked about putting a value on a woman’s life and how important that is. Kind of changes my mindset a little bit. Like, I am worth having life insurance on. My life has value, and that is why it is important.
This is very informative. I had no idea so many women were forgoing life insurance policies. With so many being breadwinners it is vital they do it. Though I too am guilty of putting other financial responsibilities first.
I have it through my job. I wish I had more than I do.
This is such a very interesting and informative article to read. You gave us a very useful reason on how life insurance is important not only for woman but for all of us.
I was unaware of the statistic that women put off getting life insurance. I’m really glad I’m covered!
This is so important to have as we don’t know when life can take unexpected turns. And this is an great reminder for all who are waiting to get insurance
I have been learning and researching a lot these days about getting a life insurance. I think it is an important step for us women to make!
This is one thing I’m glad we were on the same page and tackled headson. No matter how you see it, Life Insurance is very important nowadays due to shorter life expectancy and other complications springing up around us.
So many information on here about insurance that I didn’t know prior to this. I myself am guilty of not prioritising insurance. Not sure if it’s just where I’m from or how I was brought up, but thank you for sharing this! Gives me something to research after this.
Thank your for the post. Very informative about life insurance. Now I know better on what and how to invest on
This article really hits home for me because Life Insurance is something that I rarely think about for myself. Recently my husband has started a new career which is very dangerous so we immediately began looking into life insurance for him. I, however am now transitioning into a stay-at-home position and figured I probably just would need any coverage because of that. After reading this article I am reconsidering! Thank you for sharing this informative article!!
Life insurance premiums are a drop in the bucket compared to the value they bring to the table of future protection. I pay a mere $38 a month for $350,000 coverage and that is in addition to the policies through my employer, which are literally pennies. It seems like a no-brainer to me to get at least one policy to pay off your mortgage and other debt for your spouse/partner if nothing else.
I’m one of those women who immediately think that life insurance is out of my price range. But now I’m thinking I should at least check prices before I make that choice.
I’m guilty of not having enough life insurance. Now that the kids are grown, it doesn’t seem to be as much of a priority (not that I had it when they were young either). It’s definitely something that families should look into. Hopefully you’ll never need to use it, but it’s always better to be prepared.
I love this post. most women now just want to sit at home and not do anything and still don’t want to invest using their children as excuses
I can very well relate to the statistics and the reality having been in the insurance sector for long. In our country situation is even grimmer.
thank you for this informative and detailed post about insurance. really helpful!
Lots of great information in a easy to understand post. Thank you
Very motivational post for women.. I believe we should encourage women to take stand for themselves…
Such a informative post . Thank you
Gave me so much to think about honestly. I need to start taking care of myself especially as I am living abroad. Thanks for this informative post
This was really interesting to read. I’ve read a lot (and written a lot!) about gender differences in other forms of finance but had never considered it in terms of life insurance. Thanks for sharing!