Life Insurance: A Woman's Safety Net
According to the Life and Health Foundation for Education (LIFE), 64 percent
of women have no life insurance and those who do have about half as much
coverage as their male counterparts. Women's contributions to their families
are considerable from extra income to childcare.
Regardless of your age, financial or familial situation, you likely need
life insurance to help preserve your family's financial future and ensure your
debts and funeral costs don't burden your loved ones.
If You're:
Married Without Children
Your husband likely depends on your income to some extent. The life
insurance you purchase covers funeral costs and allows time for your spouse to
cope with the loss and get back on his feet.
A Single Mom
As the sole wage earner and guardian, your need for coverage probably
exceeds most. However, according to LIFE, almost four in 10 single parents are
without any life insurance. Many single moms are strapped for cash and think
they can't afford the additional expense. However, a healthy 25-year-old woman
can pay as little as $9.00 a month for a $200,000 policy. That's less than a
25-year-old man would pay. Even if you are slightly older (in your forties),
you can still get an adequate policy for around $15.00 a month.
A Stay-At-Home Mom
Your importance as a stay-at-home mom is often undervalued by society. So
you may feel it isn't necessary to have life insurance because you don't
contribute monetarily. However, if you were no longer able to care for your
children and your home, your husband would have to hire a person to take over
those responsibilities or work fewer hours and tackle the duties himself. A
life insurance policy helps your family to maintain its quality of life in your
absence.
An Empty Nester
College is a huge expense that often requires dual incomes. If you passed
away unexpectedly, your husband might be forced to use up his retirement
savings to continue helping the kids pay for school. Or, maybe your children
would have to alter their plans to adjust to the financial changes. A life
insurance policy makes up for your lost income, helping your family to continue
on financially unfazed.
A Single Lady
Being single doesn't mean you are without responsibilities. A life insurance
policy helps covers funeral expenses as well as any outstanding debts and loans
so they aren't passed on to your parents or siblings.
Types of Life Insurance
Term Life Insurance: Term life insurance is more flexible
and less expensive than permanent. It's best suited for younger families with
several dependents, but without the financial means to pay the higher premiums
of permanent whole or universal policies. This type of life insurance last only
the number of years you elect. However if you choose this term life insurance,
make sure it's annual renewable or convertible, otherwise it can become quite
expensive.
- Level Term:
Premiums and coverage are fixed over a certain time period.
- Increasing/Decreasing
Term: While premiums stay the same, the amount of coverage
increases or decreases over a designated amount of time.
- Renewable Term:
Your term life insurance inevitably increases as you age, but your health
is less predictable. A renewable term policy allows you to renew your
policy without another medical examination.
- Convertible Term:
This type of policy works well if you are planning to buy permanent life
insurance in the future. It allows you to convert your term policy into a
permanent one after a designated amount of time.
- Group Term:
This insurance is usually purchased by an employer and covers several
people, so the premiums may be reduced.
Permanent (Cash Value) Life Insurance: The premiums
for permanent life insurance are five to ten times as much as for term life
insurance. Permanent life insurance usually covers you for your lifetime and
often offers a cash value-you can actually accrue money throughout the life of
your policy.
- Traditional Whole
Life: If you pay the premiums, this policy won't expire. Many
whole life policies have a cash value. This type of life insurance is
intended to cover the higher cost of your premiums as you age.
- Universal Life
Insurance: This type of life insurance is the most flexible. As
your financial needs change, so can your premiums. As with whole life,
universal life has a cash value feature in which part of your premium
payments are placed. Once a substantial amount has amassed, you can use
all or part of this amount for your future premium payments. However, once
the money get used up, you have to begin paying again or risk losing your
life insurance.
- Variable Life
Insurance: With this type of policy, you can invest in stocks,
bonds and mutual funds. Your money grows more quickly than with whole or
universal policies, but there is more risk. However, many variable
policies guarantee your death benefit won't fall below a minimum level.
- Variable Universal
Life Insurance: This type of life insurance combines the theory
of the universal policy and the variable policy. It collects your money to
be invested or used to pay future premiums.
Not knowing how your family members would cope without you is difficult
enough. At least you can help ensure their futures are financially sound.
