By Suzanne Stevens
Although women make up almost half of the workforce, it appears that many women still lack long-term coverage. This can be seen in the number of insurers adapted to the needs.
When you’re young, you feel invincible. Why would we need life coverage when we have few assets, no dependents and we are in good health? To some extent, this is true. When entering the workforce, most people really only need enough life insurance to pay off debts and pay for funerals. But where the real need arises is with disability insurance. The most important thing that women need to protect at this stage is their ability to earn an income; they still have a lifetime of paychecks in front of them and they need to protect them. Although young women are not as likely to suffer from a serious illness like cancer, they could still be the victims of an accident, for example, which could affect their potential for future earnings.
For women who work with families, in addition to making sure they have disability coverage, they should also prioritize death coverage. When women have financial dependents, they must make arrangements for those they leave behind in the event of death. Critical illness coverage is also essential here, as the likelihood of illness increases with age and unforeseen costs can arise.
Stay-at-home moms may think they don’t need life coverage because they’re not earning an income. However, one thing that is often overlooked is the importance of temporary disability or impairment insurance. If a stay-at-home mom becomes ill or injured and is unable to care for her children for a period of time, it could lead to unforeseen expenses for the family, such as the cost of child care or transportation. Temporary coverage would fill this gap. As with working mothers, critical illness coverage is also essential, again for additional expenses associated with illness or injury.
It is essential that single mothers have full life insurance, to cover their families for all eventualities. Death, disability and critical illness are all critical.
For working women in their 30s and 40s without children or significant others, their focus should be on disability and serious illness. While they may think that because they don’t have dependents they don’t really need life insurance, these women still need to protect their ability to earn an income. A death cover amount will still be required for final expenses associated with the death, such as the cost of the funeral and any taxes that may be due.
The general assumption about age and life insurance is that the older you get, the more death coverage you need. However, the opposite is true. Usually, as people get older, their financial liabilities tend to decrease. You need less death coverage as well as less disability coverage because you have fewer paycheques to protect. What should increase for women at this stage of life, however, is critical illness coverage. Good health becomes much less certain and cancers, heart problems and other diseases become more common.
The golden years
Once women reach retirement age and start living off their retirement savings, they no longer need disability coverage because they are no longer actively earning income. Critical illness insurance remains a high priority in the golden years, as declining health becomes more likely. Death cover only applies here for funeral costs and death bed costs.
Just like men, the life insurance needs of women will continue to evolve throughout their lives. So it’s in their best interests to have coverage that changes with them, so that they get the maximum benefit from what they pay for their life insurance.
Suzanne Stevens is the Deputy Managing Director of BrightRock