How Life Insurance Could Solve Women’s Estate Planning Problems

Women are receiving increased recognition for the essential roles they play in society. This increased recognition leads to greater awareness of women’s financial challenges and the financial industry’s solutions to these challenges.

The 2021 Insurance Barometer survey revealed that 43% of women think they would leave their family in a difficult financial situation if they were to die prematurely. This is five percentage points higher than the men surveyed. In other words, although the need for planning for women and their families exists, women are not satisfied that they have done an adequate job of ensuring that their goals are met and their families are taken care of. .

What are some of the unique planning challenges women have that shape their goals? For starters, women still face earning capacity issues that can make planning for retirement and extra cash in the event of death more critical. Even though women make up about 51% of the workforce today, they still only earn about 82.3% of the earnings of their male counterparts, reports the US Department of Labor.

Lower incomes 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, compared to 61% of men, with an average savings of $202,859.

But women aren’t just concerned about their financial future. Women are often responsible for caring for generations of family members. When you add reduced earning capacity to the equation, the result is that, without planning, women may have a serious need to provide financial support to families, but few resources to meet that need.

In fact, in addition to caring for children, 75% of home care providers for the elderly are women, most often girls, according to the American Association for Long-Term Care Insurance.

And these seniors are often financially dependent on their caregivers, so a woman may find herself supporting herself, supporting her spouse or partner, her children, and her aging parents. Planning for the continued care of these dependent family members is crucial if a woman becomes unable to continue in her role.

And don’t discount longevity. Women, on average, have a longer lifespan than men. In a 2020 brief, the Centers for Disease Control and Prevention reported that the difference in life expectancy for women and men was 5.7 years. For women who are married or in a relationship with a man, this means a greater likelihood that the woman will be widowed later in life. And for all women, this means that, on average, women might need care for longer periods of time than men in their later years. The costs associated with these years could significantly deplete the assets women plan to leave to their families upon their death.

Thus, compared to their male counterparts, women earn less, care for more people and live longer, and these challenges can seem daunting to those who face them daily. But with good planning and risk mitigation, women can ensure that they have secured both their future and the care of those around them.

In addition to working with a team of tax and legal professionals to create and implement these plans, life insurance can help protect families in a tax-efficient way while providing income for retirement or benefits. long-term care. For example, a life insurance death benefit can provide cash to care for several generations of dependent family members. While this policy creates cash value, as the need to care for family members decreases, the owner can use the cash value for additional income in retirement. And some policies can provide funds for long-term care should the need arise. A policy can address all three planning problems.

By understanding women’s unique and intensely personal challenges and goals, and the lasting impact they have on their family’s success, advisors can help develop estate plans to meet those targeted needs. This level of planning involves a team of committed professionals working to address all concerns. When implemented, planning is indeed a power – a power created by the knowledge that a woman’s future goals will be achieved and that she and her family will have the resources they need to live a long and healthy life. very busy.

Carma McCallie, JD, is vice president of advanced sales at Crump Life Insurance Services. Carma can be contacted at [email protected].

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