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Today, women are a financial force—building careers, raising families and increasingly becoming primary earners in their households. Yet, despite this growing economic power, less than half of women own life insurance, and the rate of ownership for women continues to be lower than for men. This gap in protection could be leaving millions of families vulnerable.
Life insurance provides a financial safety net that can provide stability for loved ones after an unexpected loss. It helps cover funeral expenses, debts, lost income and children's education. Without adequate coverage, families may struggle to maintain their standard of living and meet financial needs. This article explores why women are underinsured with life insurance, the impact of it, and what can be done to bridge the gap.
The disparity in life insurance ownership between men and women is stark, though there are some silver linings in the numbers. According to the Life Insurance Marketing and Research Association (LIMRA), 49% of women reported having life insurance in 2023, still below the 55% rate of men. It's also the fifth consecutive year that women's life insurance ownership has declined.
These are troubling trends, considering women's economic power. Approximately 70% of mothers can expect to be primary earners for their families at some point before their children turn 18. Women are also primary drivers of consumer spending and control $11 trillion in assets, expected to rise to $30 trillion by 2030.
These numbers paint a clear picture: Women are a vital part of the American economy and their families' financial security. Yet, they aren't adequately protected by life insurance. While 43% of women are uninsured and underinsured, only 39% plan to buy the coverage they need.
Several factors point to the gap in insurance coverage for women, including:
One of the primary reasons women are underinsured is due to historical wage gaps and the undervaluation of women's labor. Despite increasing participation in the workforce and growing roles as primary earners, women still earn less than men, on average. This income disparity can lead to misconceptions about the need for life insurance.
Another unfortunate reality is financial planning industries have traditionally centered around men, often leaving women without specific advice or resources. Because of that—though things are changing—many women may not recognize the importance of life insurance coverage and struggle to get an answer to questions like “How much life insurance do I need?” because resources are male-centric.
Traditional societal views have also contributed to this coverage gap. Women have often been seen as caregivers first and earners second, even though women are more educated and financially contribute more to household incomes than ever. But that outdated view can influence women's own perception of their need for life insurance.
Women are also more likely to be the caregivers for children, aging parents and other family members. There's also a perception that stay-at-home parents don't need life insurance coverage. These responsibilities can leave women with less time, understanding and resources to focus on their own financial well-being, including securing life insurance.
There's also a gap in financial literacy, which can hold women back from making informed decisions about their financial protection. Research shows that women may have lower levels of financial literacy and confidence in financial decision-making than men, which leads to a gap in understanding of the benefits and importance of life insurance.
Inadequate and insufficient resources targeting women specifically may also be a contributing factor. A lack of education about financial topics, including life insurance, may mean they are less likely to seek out policies that offer more financial protection. Only 22% of women say they are very or extremely knowledgeable about life insurance.
Misconceptions can also play a role in life insurance ownership. Many people overestimate the cost of life insurance, assuming it's out of reach for their budgets. Over 40% of women who don't own life insurance say it's because it’s too expensive. Another 30% say they have other financial priorities, pushing life insurance coverage to the back burner.
Accessibility is a factor that can prevent women from acquiring coverage, too. Some see life insurance as a luxury instead of a necessity—they don't know if life insurance is worth it when trying to balance the cost versus need of it in their lives. These misconceptions can prevent women from exploring options and discovering that affordable coverage plans are available.
While strides certainly have been made over the past few years, some women still face barriers to accessing life insurance, leaving them unprotected.
What life insurance is best for you? This guide explains your choices.
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Women's underinsurance isn't just about stats and data. It has real-world consequences that can reverberate, especially on their families and their financial independence.
Every life insurance provider, financial advisor and family member should seek ways to address and close the life insurance gap. A lack of adequate life insurance coverage can leave women and their loved ones vulnerable to financial hardship and uncertainty. By recognizing and addressing this situation, women will gain more control over their future while simultaneously helping secure their family's economic well-being.
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Speak with a AAA Life Insurance agent to learn about the many options available.
This information is being provided for general informational purposes only. The Auto Club Group does not assume any liability in connection with providing this information.
Life insurance underwritten and annuities offered by AAA Life Insurance Company, Livonia, Michigan. AAA Life Insurance Company is licensed in all states except NY. CA Certificate of Authority #07861. Products and their features may not be available in all states.
AAA Life and its agents do not provide legal, tax or financial advice. Please consult your professional advisor prior to the purchase of any policy or contract.
This is a summary of product provisions and does not contain all of the benefits and exclusions. For complete terms of the insurance coverage or annuity, please contact your agent or refer to the policy/contract.
Annuities - LA
Annuities are not short-term products. During the surrender charge period, withdrawals exceeding 10% will be subject to a surrender charge that may be higher than fees associated with other types of financial products and may reduce principal. Withdrawals prior to 59½ may be subject to IRS penalties, separate from the annuity’s schedule of surrender charges.
EliteGuarantee Deferred Annuity - LAEG Contract Form Series: ICC11-4101/DA-4101 (In OR: ICC11-4101)
Platinum Bonus Annuity - LAPB Contract Form Series: ICC11-4111/DA-4111 (In OR: ICC11-4111)
Guaranteed Income Annuity - LAGI Contract Form Series: ICC14-4120/SPIA-4120 (In OR: ICC14-4120)
The payout amount you will receive is based on your individual circumstances, the options you select at the time of application and your initial premium payment.
Term Life Insurance - LT
Premiums are guaranteed. They are level for the term period and increase annually thereafter. Any sample premiums are examples only and may vary based on your personal health history and underwriting guidelines. The answers provided to the health questions are used to determine eligibility for coverage. Not all applicants will qualify. Product and its features may not be available in all states. Coverage ends at age 95.
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (8% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
ExpressTerm - LTE Policy Form Series: ICC19-1601/1601 (In OR: 1CC19-1601)
Traditional Term - LTT Policy Form Series: ICC19-1801/1801 (In OR: ICC19-1801)
Group Direct Term Policy Form Series: GT8200
Individual Direct Term Policy Form Series: ICC16-1501
Universal Life Insurance – LULG
Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
Lifetime Universal Life Insurance - LUL Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
Policy Form Series: ICC19-4701/4701 (In OR: ICC19-4701)
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (7% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
Accumulator Universal Life Insurance - LULA Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
Policy Form Series: ICC19-3701/3701 (In OR: ICC19-3701)
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (5% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
Whole Life Insurance
Whole Life Insurance (for coverage amounts of $30,000 or more) - LWL Policy Form Series: ICC18-5601/5601 (In OR: ICC18-5601)
Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (8% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
Rapid Issue Whole Life Insurance (for coverage amounts of $25,000 or less) - LRIWL Policy Form Series ICC20-7001/7001 (In OR: ICC20-7001)
Responses to the application will be used to determine approval for coverage. Not all applicants will qualify.
This Whole Life policy is referred to as graded benefit whole life insurance. If you suffer a non-accidental death within the first two years of coverage, your beneficiaries will get 100% of the base premiums you paid, plus 35%. After two years, the total amount of your coverage is paid for death due to any cause.
After the first two years of coverage, if insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (8% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
Guaranteed Issue Whole Life Insurance - LGIWL Policy Form Series: ICC16-6301/GWL6301 (In OR: ICC16-6301)
The maximum amount of Guaranteed Issue Whole Life insurance coverage per insured is $25,000.00. Subject to age requirements and policy limit restrictions.
This Guaranteed Issue Whole Life policy is referred to as graded benefit whole life insurance. If you suffer a non-accidental death within the first two years of coverage, your beneficiaries will get 100% of the level monthly premiums you paid, plus 30%. After two years, the total amount of your coverage is paid for death due to any cause.
If you are a California resident 65 years of age or older, we are required to advise you of the following. The sale or liquidation of any stock, bond, IRA, certificate of deposit, mutual fund, annuity, or other asset to fund the purchase of this product may have tax consequences, early withdrawal penalties, or other costs or penalties as a result of the sale or liquidation. You may wish to consult independent legal or financial advice before selling or liquidating any assets and prior to the purchase of any life or annuity products being solicited, offered for sale, or sold
ALAN-29546-624-XX
