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Are Women Underinsured? 7 Things to Know About Your Coverage 

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Written By  
Bethany Ramos

Today, it’s not uncommon for women from all walks of life to be underinsured. Adequate insurance for women is a rarely discussed topic. Women tend to still have lower incomes, making sufficient coverage less affordable. While all women can benefit from reviewing their coverage amounts, single women and single mothers may be even less likely to have enough insurance. 

7 Things We Wish Every Woman Knew About Insurance 

Recent research suggests* that more than 100 million Americans are underinsured, and women make up a big piece of the pie. This gap in insurance for women highlights a pressing issue: Without enough coverage, single women, single mothers, and partnered women are all at risk for financial hardship. More than a third of families say they’d face financial problems within six months if they lost a primary earner.* 

Making sure you’re covered doesn’t have to be complicated. Learning more about women’s unique insurance needs is a great place to start: 

1. Women are usually less insured than men. 

If millions of women are underinsured, what kind of coverage are they lacking? Unfortunately, gaps in insurance for women can be found across various policy types.  

Women and men are currently experiencing the largest self-reported gap in life insurance, according to a new Insurance Barometer study. Roughly 57 percent of men have life insurance compared to only 46 percent of women. Researchers say they don’t have a good explanation for this gap, as it was also observed among high-income levels. 

Still, consumers recognize the need for coverage and want to prepare for the unexpected. One hindrance identified by Insurance Barometer was miscalculating cost. Women might put off purchasing life insurance because of the potential expense, even though 72 percent of people overestimate a policy’s price. 

2. Supplemental insurance can prepare families for “what-ifs.” 

For women with children, one of the biggest motivators for getting insurance is protecting a family. Here are a few common policies: 
  • Accidental Death and Dismemberment (AD&D) Insurance: A less expensive alternative for those who can’t afford life insurance, AD&D provides a lump-sum benefit if the insured person dies or suffers a severe covered injury (i.e., loss of limbs, sight, or hearing) due to an accident. AD&D is also guarantee issue. 
  • Hospital Accident Plan (HAP) Insurance: HAP provides a fixed daily cash benefit if you’re hospitalized because of a covered accident. This benefit can help families cover out-of-pocket medical expenses, which can quickly add up during a hospital stay. 
  • Life Insurance: The purpose of life insurance is to help provide financial security in the event of untimely death. It can help cover expenses like mortgage payments, outstanding debts, and childcare and even future costs like college tuition.  
  • Recuperative Care Insurance: Recuperative care insurance offers daily cash benefits for eligible hospital stays related to a covered accident or illness. This coverage can help replace lost income if you’re unable to work, allowing a family to cover expenses and maintain their standard of living. 

These different types of insurance for women can create a comprehensive shield. Life and AD&D insurance protect against worst-case scenarios, while recuperative and HAP insurance help families manage the financial challenges associated with illness, injury, and recovery. 

3. Insurance can be used as a financial planning tool.  

There are plenty of ways that insurance for women can support financial planning—like utilizing life insurance for wealth transfer and purchasing coverage for risk management. Currently, one of the more prevalent uses is in caring for aging parents. Women in the “sandwich generation” are finding themselves financially stretched while caring for both parents and children. 

In this instance, long-term care insurance can help cover the costs of in-home care, nursing home care, or assisted living. For aging parents with limited savings or retirement income, HAP insurance could offer an additional source of income if they’re ever hospitalized. With so many dependents, ample life insurance for women feeling “sandwiched” is also important. 

4. Good coverage can extend your emergency fund. 

LendingTree’s latest survey shows that nearly half of Americans wouldn’t be able to pay for a $1,000 emergency. Meanwhile, the average cost for annual emergency home repairs is well over $1,000. Carrying enough coverage—homeowners’/renters’, home warranty, and otherwise—helps to buffer the cost of unforeseen bills, making it less likely that you’ll have to dip into your emergency fund.  

5. You may need to revisit your workplace coverage. 

Workplace insurance policies usually have limits, meaning they’ll only pay up to a certain amount for covered expenses. Health insurance might have annual or lifetime maximums on coverage, which will depend on the policy you select. If your company offers group life insurance at low or no cost, it’s not likely to carry over if you change jobs and may also have a lower cap on coverage. 

To fill in the gaps, it helps to review your company-provided policies, calculate how much coverage you need, and purchase supplemental insurance. 

6. You can get life insurance for children. 

Life insurance can provide protection in tragic circumstances for any member of the family. But for children, purchasing a policy at a young age also offers financial benefits.  

Some types of life insurance, such as whole life, accumulate cash value over time. By buying a policy for a child, parents can build up cash value that can be accessed in the future for college or a down payment. Purchasing life insurance for a child also locks in their insurability. As children generally have fewer health issues, they’re more likely to qualify for life insurance at a lower rate they can keep as they get older.

7. You might want to reread your policies. 

Speaking of gaps in insurance for women, even the highest quality coverage can have unexpected costs. Life changes, like marriage, divorce, childbirth, or a change in employment, can also impact your insurance needs. Simple as it seems, taking time to read your policy and regularly reviewing your coverage can help you ensure you’re adequately protected. 

If you need more coverage, signing up through a group, like a professional association, travel club, or bank/credit union, could offer lower rates. Group prices on insurance may be as much as 8 percent lower than purchasing through an insurer’s website.

The takeaway: More than just protecting against misfortune, it can help to view insurance as a proactive tool used to support your family’s financial wellness. Ensuring adequate insurance for women is as much about personal protection as it is about establishing a safety net and creating a secure future. 

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