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Do You Know Why Women Need More Life Insurance Than Men?

The “sandwich generation” is becoming increasingly wedged between two generations of dependents. Their children are staying home longer and postponing financial independence. At the same time, their elder parents are living longer and becoming financially dependent on them.

Talk about a financial squeeze! And so the need for life insurance has changed – especially for women. Let’s look at the example of John and Mary, the typical couple.

Young parents like John and Mary used to buy 20 year term insurance. The idea was that in 20 years the kids would be at least in college and halfway out the door. These days, that is not a sure thing. So now, John and Mary could need life insurance for 25 or even 30 years to continue to support their children.

But, hold on: John and Mary also assumed that both their parents would live comfortably on retirement money and then pass the balance on as an inheritance. However, their parents could live much longer than anticipated, given current mortality.  Grandma and Grandpa could become dependent on John and Mary both financially and for personal care. And so the need for life insurance for family protection could stretch even more decades.

Actually, the need for life insurance on John and Mary may not be equal: it could very well be that more is needed on the life of Mary. Why? Because statistics show that women serve as caretakers for elder family members more frequently than men.

Sure, when John and Mary were dedicated full-time to their careers, and bringing in similar incomes, they had similar amounts of life insurance. But if Mary is going to assume the role of family provider for grandma and grandpa, then more coverage is needed on her for their benefit.

Is your family dealing with this challenge? How did you adjust your life insurance planning – did it lead to different product choices?