Why All Women Need to Get Life Insurance
As soon as someone mentions the words “life insurance,” does it make you want to fluff up your pillow for a trip to ZZzz-town?
That’s totally normal.
What if we said we need your attention for about five minutes? Instead of a snoozy lecture, we promise to get your attention — and keep it.
Here’s the best way we can think of to get your attention: Getting life insurance is all about making sure your family is cared for when you die.
Keep reading to learn how you can make this oh-so-important purchase happen for you and your family.
Why You Need Life Insurance
First, a fact: You need life insurance for one really, really big reason: It helps you protect your family.
Next, a startling statistic: One in five households with children under age 18 did not have life insurance in 2016. This amounts to 3.7 million fewer households compared to 2010 results, according to the Life Insurance Marketing and Research Association (LIMRA).
Of those families who have no life insurance coverage, 73 percent recognize they need life insurance. What’s more troubling is that 62 percent say they would be in immediate financial trouble if a primary wage earner died.
Take a look at your particular situation. What would happen if a bus sideswiped your Fiat tomorrow and you died? (Sorry to be so blunt.)
But it really does take a little bit of imagination. What would life insurance help you do? Start with the sentence, “Life insurance would help me…”
We’ve filled in the blank with a few ideas. Check them out — we’re down to four minutes!
Provide for Your Family
Let’s revisit the bus-and-Fiat scenario. You must ask this question because it gets to the heart of it all. What would happen to your family if you don’t buy life insurance?
Life insurance offers your family peace of mind that they’ll get financial protection when you die. The death benefit can offer assistance with:
- Mortgage payments or rent
- Car payments and car insurance
- Basic needs like food
- Running your household
- Health insurance
- School supplies
Every family is so different. Consider all your expenses — actually make a list. What unique aspects do you have? Do you have a disabled child or other relatives? Life insurance can ensure that your loved one is cared for in the most comprehensive way possible (don’t forget to consider guardianship as well in that situation).
Anyway, think of your exact family members, from little Janie to Grandma June. Make this personal — because it is.
Pay Funeral Expenses
Did you know that the average funeral can cost over $11,000? Other types of expenses related to your death:
- A burial plot in a cemetery
- A stone marker
- Grave opening and closing costs
- Services from a mortician and funeral home
- Staffing for funeral ceremony
- Hearse and/or service car
- Printed materials like ceremony programs and prayer cards and more
- Other expenses
Plus, what happens if you ran up a lengthy hospital bill after you got hit by the bus in your Fiat? It’s all too easy to rack up thousands or even tens of thousands of dollars in medical bills — and your loved ones are also responsible for these medical bills.
Pay for Child Care
If your kids are young, you know how much you pay for child care. Seventy-two percent of parents say they spend 10 percent or more of their household income on child care, according to a Care.com survey, compared to 71 percent in 2019. The survey reported that half of families (55 percent) spend at least $10,000 per year on child care.
When you die with young children, your spouse, partner or other family member may have to work outside the home. You can use your life insurance benefit to pay for additional or existing child care needs.
Pay for College
You may not even be thinking long-term when you consider your needs. Why not, though? You can use your life insurance benefit to pay for college.
The average total price for a 4-year degree is approximately $122,000, and only gets steeper as the years pass by. Look beyond the right now. How old are your children? If you don’t have children, maybe you want to provide for nieces and nephews.
How to Pay for It
Three minutes left! One of the biggest stumbling blocks for most women is the cost of life insurance. It’s common to hear, “Ugh, another payment.” Your Mint account already alerts you regularly: “Unusual spending in auto” or “Unusual spending in home improvement.”
At Purse Strings, we get it. It’s difficult to stomach another expense.
However, remember that life insurance is typically super affordable:
For example, if you’re in your 40s and buy term life insurance, the average cost per month is a low $21.75. (That’s way less than the cost of a 15-minute Target run.)
Average term life insurance cost per month
Now, it’s more expensive if you opt for whole life insurance or another variation of “whole” insurance.
What Life Insurance Covers
The type of coverage you get depends on the type of life insurance you choose. We put together a little glossary of different types:
- Term life insurance lasts for a certain number of years before it expires.
- Whole life insurance offers a death benefit and a cash value — a tax-deferred cash value account that accrues interest at a predetermined fixed rate. A certain portion of the premium you pay goes into the cash value of the policy, which offers a guaranteed rate of return. It’s a permanent type of insurance.
- Universal life insurance also has a cash value, but you can use the cash value to pay the premium, or let your accrued interest pay your premium each month. It’s also a permanent life insurance type.
- Variable life insurance works like this: Money that you pay in goes into a series of accounts like mutual fund accounts. You can gain or lose money, depending on the markets.
- Variable universal life insurance lets you adjust the premium and death benefit amount. At the same time, you invest the cash value in the policy’s cash value.
- Final expense insurance covers the cost of anything associated with your death, which could include medical costs, a funeral or cremation.
- Simplified issue life insurance means you get insurance without a medical exam but includes a questionnaire.
- Guaranteed issue life insurance lets you get life insurance without a medical exam or a questionnaire.
Aaahh, okay, we promised we wouldn’t make you snooze. Aaaand we’re on the verge. Sorry.
We want to help you choose the best type for you! If you’re not sure, ask a trusted company or advisor.
How to Get Life Insurance
So… that begs the question. How do you get life insurance?
Through Your Employer
Did you know that you can get life insurance through your employer?
Yes, you can get supplemental group life insurance through your employer. Why do people choose to opt for life insurance through an employer?
- Convenience factor: Getting it through your employer usually means signing a piece of paper — and you’re covered!
- It’s inexpensive: It also can be a good deal and sometimes offers you rates you can’t find when you’re just shopping around.
- It’s ideal for those with serious medical conditions: Let’s say you have a preexisting condition, like diabetes or cancer. You may qualify for a much better rate through your employer’s group policy than what you can get on your own. You won’t undergo a medical exam, though you might have to fill out a detailed questionnaire.
Disadvantages of Group Life Insurance
So, if it’s cheap and easy, why might it be a bad idea to get life insurance through your employer?
- You may not stay with your employer your entire career. Let’s say you work for the same employer for 10 years. When you decide to leave, you may be able to convert your group policy to individual life insurance but the cost could go up significantly. If you have no backup job, you’ll run into another problem: You have no life insurance at all. Just remember, it’s kind of like health insurance — you don’t have it if you lose or leave your job.
- Your next job might not offer group life insurance. Obviously, this is an issue if you rely on your job for life insurance. You may need to seriously consider the ramifications of getting life insurance through your employer from the get-go.
- You usually don’t get the same range of policy options through your employer. Looking for a more complex product like whole life or universal life? You’re probably going to need to consult a financial advisor or insurance broker.
- You might not be eligible for as much coverage through your work. You might decide you need $1 million in coverage but can’t get that much through your job.
Online or Through a Financial Advisor
Visit with a trusted financial advisor or buy from an independent broker.
The most important thing you need to know: Shop around! You don’t want to pay more than you need to!
Let’s say you already work with an independent insurance agent or financial advisor you trust. He or she may offer you some quotes. Just know that you may find cheaper options online.
Get Life Insurance to Protect the Ones You Love
We promised you five minutes.
How’d we do?
Oh, and one more thing, for homemakers: If your partner dies, how do you cover your family?
Furthermore, how can you afford another payment when you’re already cutting corners? Decide how you might be able to save money or make more. Here are a few suggestions:
- Cook meals at home instead of going out to eat.
- Use coupons when you shop.
- Buy in bulk to minimize your shopping costs.
- Watch your utility usage!
- Forge ahead without cable. Or opt for cheaper Netflix or a streaming service with cheaper subscription fees.
Again, getting life insurance is all about making sure your family is cared for when you die.
Are you ready to get life insurance now?
We hope so.
We will provide you useful and timely information you can use to be #financiallyfearless