In today’s fast-paced world, women are more multi-faceted than ever. With an ever-increasing number of roles and responsibilities, they’re pursuing ambitious personal goals and contributing to their households financially. In fact, 54% of women in partnerships are the primary earners in their families. Whether it’s leading in the business world, impacting the community, or managing their homes, modern women often find themselves juggling countless priorities. Amid all this, it’s easy for them to overlook their own needs.
One critical area where this often manifests is life insurance. Despite the importance of securing what they’ve worked so hard to build, only 47% of women in the U.S. have a life insurance policy. Yet, life insurance can be crucial to a woman’s financial strategy. It protects her loved ones, safeguards her accomplishments, and offers financial flexibility to help her achieve personal goals.
Many women may think of life insurance solely in terms of its death benefit. However, policies—especially those accumulating cash value—can offer numerous living benefits. Here are five compelling reasons why life insurance can be a powerful tool for modern women:.
1. Diversifying Retirement Income
Nearly 25% of women consider life insurance a supplemental income source during retirement. One strategy involves tapping into the policy’s cash value during market downturns, allowing other investments time to recover. This approach can also help delay Social Security benefits, increasing their value. Best of all, the income drawn from the policy is tax-free, offering more financial security during retirement.
2. Bridging the Gap in Education Expenses
Many parents save diligently for their children’s college education, but unexpected shortfalls can arise. Life insurance can fill this gap, potentially reducing reliance on costly loans. Unlike traditional education savings plans, such as 529 plans, life insurance offers greater flexibility. It can also be used to pay off personal student loans or to fund educational needs beyond college, such as private school tuition or vocational training.
3. Supporting Extended Personal Leave
Women often take on caregiving roles, with two-thirds of unpaid family caregivers being women. Whether it’s stepping away from work to raise children or caring for an aging relative, these responsibilities can pause career growth and disrupt retirement savings. Life insurance policies that accumulate cash value can provide financial support during these planned or unexpected leaves, ensuring a safety net during pivotal life events.
4. Planning a Legacy for Future Generations
A third of women are using life insurance to facilitate wealth transfer to the next generation. The policy’s death benefit can cover final expenses, preserving other assets intended for inheritance. Additionally, life insurance offers a tax-efficient way to pass wealth to beneficiaries, including charities. Multi-generational wealth transfer strategies are also becoming popular, where a life insurance policy on a child benefits grandchildren, ensuring a lasting legacy.
5. Building a Business
Women are making waves in entrepreneurship, with 42% of U.S. companies fully or partially owned by women. Nearly 2,000 women-owned businesses are launched every day. Life insurance can provide the capital for women with entrepreneurial aspirations to start or expand a business. Whether it’s purchasing equipment, growing inventory, or opening a new location, life insurance can offer financial backing. Additionally, business owners are incorporating life insurance into employee retention strategies and succession planning.
Embracing Flexibility
Just as women wear many hats, life insurance can serve many purposes. It’s a versatile solution that can enhance any financial strategy, from covering funeral expenses to funding educational pursuits, supporting caregiving roles, or building a business. By prioritizing life insurance, women can protect both their present and future, ensuring their loved ones and ambitions are well cared for.
Consider integrating life insurance into your financial plan to secure your hard-earned achievements and pave the way for future success. Embrace the flexibility it offers and prioritize what matters most: your future.
If you’d like to learn more about how life insurance can fit into your financial strategy, let’s talk
*Accessing cash value will reduce your policy death benefit and values, may result in certain fees and charges and may require additional premium payments to maintain coverage. Ask your financial professional for details on accessing your cash value, including how it might impact the coverage guarantees and situations when the values you access could be taxable. Always consult your tax advisor before accessing a policy’s cash value.
This post is for informational purposes only and should not be considered as specific financial, legal or tax advice. Depending on your individual circumstances, the strategies discussed in this presentation may not be appropriate for your situation. The information in this material is not intended as tax or legal advice. Always consult your legal or tax professionals for specific information regarding your individual situation.
1 “Younger Women Are Increasingly Earning the Title of ‘Breadwinner,’” 2021 Wells Fargo survey, reported in Business Wire, March 8, 2021.
2 “Facts About Life 2021,” LIMRA, 2022.
3 “The 2021 Insurance Barometer Study,” LIMRA.
4 “Caregiving in the U.S. 2020,” AARP, National Alliance for Caregiving, May 14, 2020.
5 “Women Bear the Brunt of Elder Caregiving,” MyElder.com, November 2021.
6 “Women in Small Business Statistics in the U.S.,” The Motley Fool, May 18, 2022