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How to narrow the life insurance gender gap

Our survey found that men with life insurance valued their lives financially nearly 2 times more than women. Here’s what you can do about it.

Our Gender, Roles and Life Insurance Survey showed that there is a life insurance gender gap, but what can be done about it.

Only 67% of women surveyed said they had life insurance, compared to 79% of men. Of those who had an individual life insurance policy, the women had an average coverage amount of $231,342, compared to men who had an average amount of $423,102. That means that men with life insurance valued their lives financially nearly 2 times more than women with life insurance.

This doesn’t mean that men think their lives are twice as valuable as women’s, of course. It just means that, thanks to external factors, such as gender pay disparities and life insurance providers that prompt people to choose coverage based on income, men tend to have more life insurance coverage than women.

The life insurance gender gap gets even more pronounced in households where the man is the primary income earner and the woman is the primary caregiver. A stay-at-home mom might not consider taking out a life insurance policy, for example, but that means her family will have to figure out how to cover the high cost of child care should she passes away.

How can we solve the life insurance gender gap, and help families get the life insurance coverage they need?

It might be time for men and women to stop thinking of life insurance as a way to cover lost income and start thinking of it as a way to provide future financial stability. Here’s how you can help solve the life insurance gender gap.

Understand what causes the life insurance gender gap

Why is there a significant gap in life insurance coverage between men and women? “There are a number of factors in play here, starting with the conventional life insurance wisdom, which states that you should have coverage that’s five to 10 times your income,” explains Brittney Burgett, Haven Life’s marketing and communications director. “That’s problematic when you’re looking at coverage for a stay-at-home parent, which the majority of [survey] respondents agreed should have life insurance coverage.

Burgett helped spearhead the Gender, Roles and Life Insurance Survey, and hopes it will help parents make better decisions about their life insurance needs. “One of the fundamental problems with life insurance is that there are still some antiquated viewpoints about life insurance only being needed for the primary earner in the family,” she says.

Brendan Willmann, a CERTIFIED FINANCIAL PLANNER™ professional at Granada Wealth Management, agrees. “If one spouse is solely a caregiver, the traditional advice is to consider a relatively low amount of coverage. However, the financial contribution of a stay-at-home parent is frequently underestimated.”

Both partners play a key role in ensuring the financial stability of the home, whether they earn an income or provide child care — but traditional life insurance advice, which suggests men and women purchase coverage commensurate with their income, doesn’t acknowledge that reality.

Consider life insurance coverage for both partners

If you want to solve the life insurance gender gap, consider taking on life insurance coverage for both partners. When only one half of a couple gets life insurance through an employer, for example, it’s time to start looking into other coverage options.

“Many people rely on employer-provided life insurance, which is usually not enough,” Burgett explains. Since employer-provided insurance is often based on income, the gender pay gap feeds into the life insurance gender gap — and the coverage gap gets even bigger in families where men are the primary earners and women are the primary caregivers.

Men and women can address this problem by purchasing their own term life insurance policies to equalize the gap and ensure that their family is fully covered.

“I suggest couples consider a higher benefit amount for a shorter term,” Willmann says. “This allows for reasonable premiums while providing adequate protection for the breadwinner in the event the caregiver of their children passes unexpectedly.”

Betty Wang, a CFP® professional and founder of BW Financial Planning, offers similar advice. “I recommend the same dollar amount for the breadwinner and caregiver, especially if the couple have children or people who are financially dependent on them. If the caregiver were to pass away, the breadwinner would have to either take on the caregiving responsibilities (which may take away from earnings) or hire qualified help.”

Burgett agrees. “That’s the main thing I would love to see more of coming out of doing this research,” she explains. “Looking at the amount of life insurance you need less as a multiplier of your salary, but really recognizing the equal impact that both parents bring to the household regardless of what their salary is.”

Make sure you have the right amount of coverage for your family

To solve the life insurance gender gap, think of life insurance coverage as a way to cover a family’s financial needs rather than an individual’s income.

A life insurance calculator can help you determine what level of coverage you need to protect your family and cover similar financial responsibilities, such as shared debt from a mortgage, car loan or credit cards

This calculator even works if you are a stay-at-home parent. If you put your income at $0, for example, the Haven Life calculator wouldn’t assume you didn’t need any life insurance. “It would look at the number of children, how old your children are, does your spouse work, how much does your spouse earn,” Burgett explains, “to provide you with an estimation based on the financial obligations you have and what your family structure looks like.”

In addition to consulting a life insurance calculator, couples can also ask themselves what new expenses might come up after one partner passes on. “Consider what would happen to your family if there was only one parent,” Burgett suggests. “How is child care going to work out?”

Since life insurance is designed to protect the entire family, calculating the true cost of every member’s labor, whether performed in the home or outside of it, can help you determine how much coverage you need.

Once we start acknowledging that unpaid caregiving has just as much value as paid employment — and yes, that includes financial value — we’ll begin to start narrowing the life insurance gender gap. We can choose to solve the life insurance gender gap on our own, one family at a time.

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Nicole Dieker is a full-time financial writer. Her work regularly appears on Bankrate, Lifehacker, The Write Life and numerous other sites. She is the author of Frugal and the Beast: And Other Financial Fairy Tales.

This article is sponsored by Haven Life Insurance Agency. Haven Life does not endorse the products, services or strategies discussed here. Opinions are those of the individuals interviewed.

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About Nicole Dieker

Nicole Dieker has been a full-time freelance writer since 2012, with a focus on personal finance and habit formation. In addition to Haven Life, her work regularly appears at Lifehacker, Bankrate, CreditCards.com, and Vox. Dieker spent five years as a writer and editor for The Billfold, a personal finance blog where people had honest conversations about money, and is the author of Frugal and the Beast: And Other Financial Fairy Tales.

Read more by Nicole Dieker

Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

Our disclosures

Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus.html

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