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Are Female Federal Employees Under-Insured?

Life Insurance

Studies show that despite advancements in closing insurance and pay gaps, women are still less likely to own life insurance policies, and more likely to own lower coverage amounts than their male counterparts. Think: $206,357 on average for men, compared to $160,782 for women (LIMRA, 2016).

Part of this could be due to persistent income gaps. GAO published a report in Dec 2020 showing that women in civilian federal positions were still underpaid compared to male counterparts, about 93 cents for every $1 overall. Generally, people purchase life insurance as a multiplier of income, so the income disparity could carry over into life insurance choices. However, 43 percent of adult women have no life insurance whatsoever. (Insurance Information Institute, 2015)

Another possible cause could be rooted in the value women place on their contributions to their family. Regardless of the role they serve, whether as a single parent, breadwinner, or in a partnership earning about the same as a spouse, there is value in what women provide to their families, which would likely need to be replaced if they were to unexpectedly die. Even if a female Civilian Federal Employee were to eventually decide to leave federal service and become a homemaker; stay-at-home parents provide housework and childcare that equates to roughly $180,000 in services every year (Bankrate, 2020).

In a 2019 survey conducted by Haven Life, women and men were asked what the impact of their deaths would be on their family. Both men and women said that their deaths would impact their families equally. However, of those surveyed, only 67% of women had life insurance, compared to 79% of men. This data shows that while many women value contributions to their family equally, they may not assign the same financial value to their role.

The more a family relies on an someone’s income or other contributions, the more important it is to help protect that family’s future with a life insurance policy. Even if women are not the primary breadwinner in their household, life insurance can still help protect their family in case of death or disability, given that even the loss of supplementary income can cause significant financial strain in many households.

Recent data from OPM shows that the number of women in the federal workforce is continually rising. The life insurance coverage gap is continuing to impact women as they enter the federal workforce and increase their economic impact on their family (OPM, 2020).

Life can be unpredictable. WAEPA is keenly aware of the many roles federal workers and their spouses play in the lives of their families, and knows the immeasurable loss that comes with losing a loved one.

Through our programs, Feds and their spouses, can apply for up to $1.5 million in Group Term Life Insurance* coverage, regardless of salary. This gives Feds and their families an opportunity to determine what policy structure is necessary for their situation, and allows all familial contributions, even unpaid, to be part of the decision-making process.

In addition, WAEPA coverage is portable. If Feds choose to leave the Federal government, take some time away from the workforce to stay home, or retire, WAEPA is committed to providing coverage that can fit changing needs.

While the exact amount of life insurance needed should be discussed with a financial advisor and a life insurance professional, one thing is certain – the life insurance conversation needs to reevaluate how we place financial value on everyone’s contributions to the family. Everyone who has someone that depends on them, needs their own life insurance policy.

For women looking to identify and better understand their life insurance needs, see the free calculators available on waepa.org today.

Disclaimers

*Underwritten by New York Life Insurance Company on Policy Form GMR.

This post is for informational and educational purposes and is not designed, nor intended, to be applicable to any person’s individual circumstances.