The Coverage Gap: Women are Carrying Less Life Insurance Than Their Male Counterparts

According to 2019 consumer study conducted by LIMRA, only 56% of women have life insurance, compared to 62% of men. Moreover, women are likely to carry less coverage than their male counterparts.

While the amount of life insurance coverage women purchase has increased nearly 21% since 2010, it still trails behind men’s coverage on average, with policy face amounts averaging at about $206,357 for men, compared to $160,782 for women (LIMRA, 2016).

As gaps in pay and household responsibilities tend to evolve, this gap in coverage seems to persist, despite data showing that women do place equal financial value on their lives compared to men.

Part of the reasoning behind the difference in coverage could be due to continued income gaps. Many people base their life insurance coverage on a multiplier of their income (usually about 5 times). As women continue to earn less than men overall, (GAO published a report in Dec 2020 showing women in civilian federal positions were still underpaid compared to male counterparts, about 93 cents for every $1 overall), this could be a factor in the gap.

While many of the ‘intangibles’ in life can be difficult to place a monetary value on (especially since thinking about the value of our lives can feel morbid), there is an undeniable financial value in unpaid labor, which is why women should carry equal life insurance coverage to their male counterparts overall. Regardless of how a family is structured, whether with two working parents, one homemaker, or a variety of other combinations, the contributions that women make to their families are a service that would likely need to be replaced if they were to pass away. As an example, stay-at-home parents provide housework and childcare that equates to roughly $180,000 in services every year. (Bankrate, 2020).

The argument also stands for single parents. If a single Mother, for instance, were to unfortunately die, there would be even more need for a life insurance policy to be in place to help support her children financially, since she would no longer be earning income to support them in the short-term, let alone invest in future expenses, such as a college fund.

Life insurance is intended to help protect an individual’s loved ones from the financial fall out that could occur if they were to die. Is it possible that women are underinsured because they are undervalued, either by themselves or others? This free calculator can help objectively assess how much coverage should be considered.

WAEPA is a nonprofit association offering Group Term Life Insurance* exclusively to Civilian Federal Employees and their families. The goal of WAEPA is to provide access to products and services that can improve the health, welfare, and financial well-being of Civilian Feds and their families. For female Federal Employees, life insurance can be a crucial component of overall financial wellness. Even if these women already have coverage through FEGLI, WAEPA can serve as an optional supplement or replacement for the existing policy.

Last year, the average member who switched from FEGLI to WAEPA saved $375 in their first year alone. This tool can provide a cost comparison between the two programs.

*Underwritten by New York Life Insurance Company on Policy Form GMR.

This post is for informational and educational purposes and is not designed, nor intended, to be applicable to any person’s individual circumstances.