Life Insurance — Is it a Male or Female Thing?

Life insurance undeniably provides families with peace of mind. Providing them the comfort of knowing that the loss of a primary income earner will not devastate the family financially. In fact, 65% of consumers with life insurance say they are able to enjoy life more knowing their love ones are financially protected with life insurance.

Traditionally, men have been the primary person insured on a life insurance contract, simply because they have traditionally been the primary income earners. However, contemporary society has experienced significant changes to the family dynamic. The result being that women are often the primary income earner as much as men. A recent stats Canada report suggested that only 27% of Canadian families had single income families. This reinforces the idea that increasingly, women should be the focus when purchasing life insurance.

Top 5 Reasons Women Should Have Life Insurance

1. Stay-at-home mothers provides a very valuable service to their family.
While it is impossible to quantify the value a stay at home mom provides to her family. Think about the financial implication to a family if someone needs to be hired to care for the kids or if the father suddenly has to stay home with the kids. Either way, this would be costly and can be mitigated with life insurance.

2. More and more women are becoming the sole income earner or primary income earner in their families.
This means the family’s financial well-being will be the responsibility of the women in this group. Their income is pivotal to maintaining their family’s lifestyle and should therefore be insured with life insurance.

3. Coverage cost less for women than men.
Life expectancy is a key factor in deciding insurance rates. Women have a longer average life expectancy compared to men. Resulting in women paying lower premiums. For example, a $250,000 20-year term policy will cost $11.35 per month for a 30-year-old female and $19.57 per month for a 30-year-old male.

4. The small business and professional women.
A whopping 73% of the clients I insured last year fall into this demographic. Physicians, lawyers, executives and entrepreneurs; all high-income earners with the need for income protection. As women continue to achieve higher educational attainment, the number of female professionals and business owners will also continue to rise.

5. Wealthy women and estate beneficiaries.
A recent article in the Huffington Post noted that “Women now control $2.2 trillion in wealth in Canada, and that is expected to grow by 70 per cent over the next decade”. This means significant wealth transfer and asset redistribution will happen in the future, resulting in massive tax implications. A significant number of women will also inherit their spouses’ assets over the next decade or two. These assets will pass to heirs in the future which will trigger disposition taxation rules. Life insurance is the most effective means of preserving asset value by offsetting taxation.

Protecting a Women’s Income is Crucial

The trend of women being the primary or sole income earner will continue rise according to a Statistics Canada projection. To achieve the goal of maintaining a family’s financial well-being, financial advisors must focus on insuring more women under life insurance policies. Advisors need to re-think the way we do business or risk alienating an increasingly important and critical contributor to the family income dynamic.