Broker Check

Practical Planning Tip: Women and Wealth - Insurance Planning

March 27, 2024

Today, we’re going to continue our discussion on women & wealth since it is Women’s history month.

I threw in this pink headbank. My daughters thought it would spice up my outfit and women would appreciate it. I’m clueless on fashion so I will take the advice of my advisors. Feel free to hit me up in the DMs if you like my headband.

So, the topic I want to discuss today is a continuation from yesterdays discussion on insurance. In particular, I want to discuss Insurance Planning for Women.

Let’s go through some insurance scenarios that may be helpful for female investors.

Importance of income protection: For women earning a paycheck outside the home, they should consider disability income insurance. A disability insurance policy will provide their family with a portion of their income in the event they can no longer work, even temporarily, due to an accident or illness. If you’re young or live a careful life, perhaps this kind of protection seems unnecessary. However, Keep in mind that approximately 25% of workers in their 20s today will face a disability at some point in their career. And according to a recent study, nearly 1 in 3 single women said they were “extremely unprepared” for any period of disability if they lost their income.

Furthermore, the importance of disability insurance is compounded when one has young kids and needs to pay for help or additional support if mom is no longer able to earn a paycheck.

Spousal coverage: Not every woman earns an income outside the home. Women who stay at home to take care of the kids and manage the household are also major contributors. In fact, according to a calculation done by Salary.com, they found that if stay-at-home mom were paid a salary based on all of the work they do, they would earn approximately $178,000 a year.

So, I’m not exactly sure how they arrived at this number, but the point is still valid: If a woman who is a homemaker taking care of the family had to stop due to an unforeseen health circumstance, EVERYONE in the family would be impacted and the proper support would need to be hired and paid for. In order to protect your family from this kind of emergency, review the option of spousal coverage.

Life insurance: As women advance in the workplace, they’re more likely to have people who depend upon them financially. With this in mind, a life insurance policy can help provide a financial protection for others in the event of your premature death. You can change the beneficiaries of your policy at any time. If you have young children, perhaps a trust should be the beneficiary of such a policy. The most common and affordable type of life insurance, is called TERM life insurance, where one is covered for a set period of time, like 10 years or 30 years. Unless you have clients with extremely large illiquid estates, term insurance should be adequate. At the very least it’s a good starting point to ensure that your clients have some element of coverage to protect their families.

The point here is that Even as women reach milestones in the workplace, they still experience discrepancies, especially when it comes to protecting their success, in particular their assets and income. It’s important to develop the appropriate insurance strategy for your female clients, to ensure that they get the coverage that they need.


You can WATCH the full video here.