Fidelity Life: 4 Reasons Women Should Consider Getting Life Insurance

Women are earning more today than they ever have before. This gives them more options for investing their earnings and creating financial security for themselves and their families. One financial decision that could benefit many women is to get a life insurance policy. This can provide financial protection for their loved ones if they pass away while also helping them potentially build wealth. However, only 47% of women had life insurance in 2021, according to LIMRA. This article will explore some top reasons women should consider taking out a life insurance policy.

1. Can provide financial security to children of single mothers

Single mothers are often the sole source of support for their children. A life insurance policy can ensure their children are cared for if they pass away. The death benefit will not go directly to the children because, in most cases, minor children can’t be life insurance beneficiaries. However, a single mother can set up a trust to receive the death benefit proceeds if the policyholder passes away. They can designate the trust to manage the assets and use them to provide for their children.

2. Can assist a partner if the policyholder passes away

Life insurance policies can help the policyholder’s spouse if the couple has children — whether the policyholder works or is a stay-at-home mom when they pass away. For example, if the policyholder is employed, life insurance can help their partner replace income and handle any of their debts. As a result, the surviving spouse can take care of the kids more easily. If the policyholder is a stay-at-home mom, life insurance can help their partner pay for childcare costs if the policyholder passes away.

3. Can help women build wealth

Permanent life insurance can help women build wealth and financial stability thanks to the cash value growth component. The insurer puts part of each premium into the policyholder’s cash value. This grows tax-deferred at a specific rate, depending on the type of permanent policy.

Once this cash value grows enough, the policyholder can use it as a source of wealth and financial security. They can either withdraw money or borrow from it at a low rate with no credit check. Loans have no due date, but interest capitalizes on the loan.

4. Can help heirs receive more assets

Life insurance death benefits are generally tax-free for beneficiaries. This can make it a key piece of a woman’s estate plan. It can allow the policyholder to pass down far more wealth to their heirs by avoiding estate taxes. At the same time, the policyholder will likely pay less in premiums than the death benefit is worth, maximizing the wealth they can pass down.

Life insurance: A crucial piece of a woman’s financial plan

Life insurance can be vital to a woman’s overall financial plan. It allows them to provide for their families if they pass away, regardless of marital or employment status. Plus, it can help women build wealth through cash value and pass more of their assets to their heirs. Women considering a life insurance policy should gather quotes from several insurers first. This helps them to pick a policy with the best rates on the coverage they need.