Can Life Insurance Help Estate Planning for Women?

It is important for women to have life insurance to provide for their families in their absence, and it is equally important for women to have estate plan to direct where and how those benefits pass. The 2021 Insurance Barometer Survey revealed that 43% of women believe they would leave their families in a difficult financial situation if they were to die prematurely. This is five percentage points higher than the men who were surveyed. While the need for planning for both women and their families are present, women aren’t satisfied they have done an adequate job when making certain that their goals are met and their families will be financially secure.

Insurance News Net’s recent article entitled “How Life Insurance Might Solve Women’s Estate-Planning Issues” says that women face unique planning challenges, like the fact they only earn about 82.3% compared to their male counterparts’ earnings, the U.S. Department of Labor reports. Lower earnings add to the difficulty of saving adequately for retirement. A recent Prudential survey found that only 54% of women have saved for retirement, with an average savings of $115,412, versus 61% of men, with an average savings of $202,859.

Women must also frequently care for generations of family members. In addition to caring for children, 75% of in-home care providers for older people are women, most often daughters, according to the American Association for Long-Term Care Insurance. These seniors are often financially dependent on their female caregivers, so a woman may find herself supporting herself, a spouse or partner, her children and her aging parents. Planning for the continued care of these dependent family members is critical, if a woman is unable to continue in her role.

There is also the fact that women, on average, have longer lifespans than men. For women who are either married to or partnered with a man, this means a greater likelihood that the woman will be widowed later in her life. Women, on average, may need care for more extended periods than men during their later years. These expenses could substantially deplete the assets women plan to leave their families at death.

Life insurance can help protect families in a tax-advantaged way, while also providing income for retirement or benefits for long-term care. A life insurance death benefit can provide liquidity to care for multiple generations of dependent family members. If that policy builds cash value, as the need to care for family members eventually wanes, the owner can use the cash value for additional income in retirement. Some policies can provide funds for long-term care, if the need arises. Even a single policy can address all three planning concerns.

At Coad Law, we value the women in our lives and understand how critical of a role they play in the well being of their families. If you are in the Madison, Wisconsin area, book an introductory call with Rick Coad to discuss your plan and ensure your family is taken care of.

Reference: Insurance News Net (March 9, 2022) “How Life Insurance Might Solve Women’s Estate-Planning Issues”

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