Life insurance as part of a well-constructed financial portfolio has become increasingly important as women continue to accumulate more economic power. According to LIMRA’s 2021 Life Insurance Barometer Study, 44% of U.S. women ages 18-75 currently own life insurance. Among people who own life insurance, women are more likely than men to have both individual and employer-sponsored — or group — insurance.
Drivers Of Planning Needs
Women are primed to build on the growing financial affluence in their lives and will need guidance to manage their wealth and achieve their goals. Financial advisors can expect women to benefit from a broad range of education and product options due to varying life stages and ongoing changes in their financial conditions. According to LIMRA research, nearly four in 10 women have a financial advisor. In addition, four in 10 women under age 45 are looking for a financial advisor, as is nearly one in five women over 45. The primary drivers for women seeking guidance include:
Wealth transfer: Women currently control one-third of U.S. household financial assets, an estimated $10 trillion and growing. The value of wealth transfers to women by the end of the decade is estimated at another $20 trillion, providing ample incentive for financial advisors and insurance companies to create solutions that women need and expect.
Education and earnings: Women continue to outpace men in matriculation and graduation from college, Pew Research Center found. More women are deferring marriage and children, providing more time for career development and wealth accumulation. Women who divorce later in life are increasingly choosing to remain single, and financial independence is becoming more commonplace. Many women are working beyond the age of 65, according to the Washington Center for Equitable Growth. This makes it essential for advisors to be successful working with women of all generations.
According to LIMRA research, women of all ages say they need life insurance. In fact, 80% of women ages 25-44, 75% of those ages 45-54 and 64% of those 55-64 acknowledge this need. Nearly half of all women over 65 say they need life insurance.
Women are as likely as men to cite the need for five to 15 years of replacement income should a primary wage earner pass away. More than one in five say they aren’t sure how much life insurance they need.
Caregiving of family member(s): Six in 10 U.S. women between the ages of 18 and 64 report that they currently provide at least part-time care for a family member or have done so in the past, AARP Public Policy Institute and the National Alliance for Caregiving report.
Responsibilities for older family members often include assisting with activities of daily living, and those responsibilities may extend to managing financial affairs for two households — their own and an aging family member’s. Caregivers are ever mindful that if something should happen to them, their relative’s care would also be in jeopardy, making them more aware of the value provided by life insurance.
Caregivers are also a ready audience for conversations about a broad range of insurance products including long-term care and disability insurance. The self-reported need for disability insurance grows as women age, from 36% to 61%. According to our research, four in 10 women ages 55-64 say they need disability insurance.
Financial advisors seeking women as clients need to remain mindful of gender differences in communication and decision-making styles. As the balance of overt financial influence in households continues to favor women, progressive and proactive financial professionals who work with women can expect their businesses to flourish.