Why aren’t more women buying life insurance?

So what’s preventing more women from buying life insurance? That was the main question and topic for advice during a recent LinkedIn event.

Executives from LIMRA and LOMA shared some useful insights into women’s ownership of life insurance and suggested a few steps advisors can take to persuade them to obtain life insurance or to purchase more of it.

Alison Salka, SVP and head of LIMRA research, LIMRA and LOMA, told attendees that the 2023 Insurance Barometer Study shows that women comprise a significant market opportunity for the life insurance industry, and they make up nearly half of the U.S. workforce, according to the Bureau of Labor Statistics. Women also said that they need life insurance. In fact, 44% of them said they need life insurance, or they need more life insurance. This represents about 54 million adults, Salka said.

In spite of this critical need, women are less likely to own life insurance than men. In fact, 49 % of women have life insurance this year, compared to 55% of men.

Woman’s financial concerns

Even though women said that they need life insurance, they are oftentimes grappling with a host of financial concerns, said Gina Birchall, COO of LIMRA and LOMA.

For example:

• Forty-seven percent of them are concerned about not having enough money for a comfortable retirement.
• Forty percent are worried about paying for long-term care services if they are to become unable to work or to take care of themselves.
• Forty percent worry about their ability to save enough money for an emergency fund.

Engaging female consumers

Because of these concerns, life insurance is not usually a top concern for many women. As a result, advisors should position life insurance as part of a way that women can use to take care of themselves and their families financially, Salka said.

As advisors work with these women, they should keep in mind that education is key. For example, 61% of the women surveyed said that they would be interested in a policy that would provide a guaranteed income for them in retirement, but fewer than half of them are even aware that such a policy exists.

Single mothers comprise another group that is in dire need of life insurance, Salka pointed out. 15. 62 million families in the U.S. are headed by single mothers, who tend to have lots of responsibility and experience higher levels of stress than men.

Yet, only 41% of single moms have life insurance, even though 59% of them said they need life insurance or need more of it. This represents a market opportunity of five million households. And 38% intend to buy life insurance this year.

Barriers to ownership

So, what is preventing many women from buying life insurance or buying more of it? The number one obstacle is lack of knowledge about life insurance, which can lead to lack of confidence. Compared to 33% of men, for example, just 22 % of women said that they are very, or extremely knowledgeable about insurance.

In addition, many women tend to be less confident in their knowledge about life insurance than men and are a little more cautious than men, which can sometimes translate into inertia and can make them more hesitant, Salka said. Also, 42% of women said that life insurance is too expensive, although this is a common misconception that is not held by only women.

Another barrier to life insurance ownership is women’s perception of the life insurance industry. Advisors must be mindful of their tone and attitude when having conversations with women. And they must be mindful of the fact that women sometimes take a longer time to decide and should be more patient with them.

What women want

As they work with prospects and clients, it is a good idea for advisors to have an idea of what women are generally looking for in an advisor. Among other things, Birchall said, they are looking for financial advice and partnership.
“They want to work with a financial advisor who will be their partner. They want someone who will listen to them,” she said.

The top attribute that women seek in an advisor is a high level of trust, Salka added. The advisor should also be experienced and possess good communications skills. “Show me that you truly understand my needs,” she said.

Sources of information

As women prepare to buy life insurance, they typically go online to do their research, although they ultimately will end up buying from a person, Birchall said. The top three social media sites that women use to find information on financial products are Facebook, YouTube, and Instagram. Birchall pointed out that the advisor’s website needs to be clear, concise, and easy to understand.

In their search for information, women also turn to a variety of sources, including the telephone and conversations with friends and family.

Women want someone to take them seriously and to listen carefully to their financial needs, Salka said. “Do not lead with a product,” she advised. “Get to know them as people, and work to build confidence and trust first. More conversations are needed.”

A few takeaways from the event

Toward the end of the presentation, Birchall shared a few takeaways with the audience:

• The insurance gap is growing—it is not getting smaller. Women are a significant and an underserved market, and the industry has an opportunity to help them understand their needs.
• Be patient.
• Build relationships.
• Empower women with knowledge and tools to protect themselves and their loved ones with life insurance.
• Help them understand their value.

Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at [email protected]. 

© Entire contents copyright 2023 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at [email protected].