A Woman's Life Insured
By Mary Welch
Tricia Paulk, CEO of Patricia Paulk Interiors, a home design and decorating firm in Atlanta, doesn’t have any life insurance. “I would rather spend my money on growing my business and enjoying my life,” she says. “Money is tight these days and I’ve talked it over with my children. They’ll get money from their father. They’re fine with my decision.”
Paulk is like many women who, for several reasons, choose not to have life insurance. While Paulk’s action is a deliberate and carefully considered decision, most women don’t even think about life insurance.
“Life insurance is critical, in general, but most women don’t have life insurance, which shows that we don’t value the price of a woman,” says Bonnie L. Seagle, CRPC® financial advisor, SunTrust Investment Services. “But if something happens to a woman, a wife and a mother, you will quickly see the value of her life.”
Pauline Green, a retiree living in Florida, says that she considers her insurance essential. “It’s something I can’t do without. I’m a widow and I know everything will be taken care of, such as my funeral expenses.”
Seagle says women – including young women just starting their careers – need to consider and purchase life insurance. “Too often young single women with no debts don’t think about life insurance. But it is a big deal and it’s crucial. It’s an investment in yourself and in your future.”
Seagle recommends sitting down with a financial advisor to consider how much a woman needs and how much she can afford to pay. “Trying to figure out what is the best policy may be difficult for women. If you go to one life insurance company, they will only sell you their policies. It’s hard to get a general feel for what’s out in the marketplace unless you do a lot of research.”
She likens buying life insurance to buying lipstick at a department store. “You go to the Chanel counter and they’ll tell you they have the best lipstick that’s perfect for you. But guess what? You go to the Clinique counter and they’ll say the same thing. What you want is someone to figure it all out for you and advise you on what lipstick to buy. Same with life insurance.”
SunTrust has insurance agents who take the research and worry away, she says. “We deal with insurance agents who go out and work with several life insurance companies and study their policies. We have the tools to shop the policies and find the best one for you.”
In deciding what is best, Seagle says there are two basic questions to ask: how much do you need and how much can you afford. “Everyone always says, ‘let’s get a half a million dollar policy or let’s get a million dollars.’ But not everyone really needs that and million dollar policies may cost more than you can pay.”
There are two basic types of policies – life insurance and term insurance. The difference between the two is that you will pay for life insurance your entire life and upon your death, your heirs will inherit the policy. For term insurance, you will pay for a specific period of time and you are betting that you will die before that term is up. If you live past your term policy, you essentially get no financial benefit. With term life there is less of a chance of a payout, she says.
There are several reasons to possibly choose term insurance. For one, it tends to be less expensive and provides coverage for a woman who has a specific purpose for that money. “A scenario is that you are a stay-at-home mom or a mom who works part-time or is an entrepreneur. You may take out a term life policy for the duration of the time it takes to raise your kids – say 20 years. If something happens during that 20 years, they will be taken care of.”
Life insurance is often the only way a woman can leave money to her children. “Especially if you are a single woman or a widow, life insurance is important to have to pay your funeral expenses and maybe pay off your house,” says Seagal. “It also is a way to give your children an inheritance so that they can pay for college so they graduate debt-free. Or the money might help them make a down payment on a house or start a business.”
“I think married or not, every woman needs life insurance,” says Green. “It offers financial security and it lets you help set up your children to make their lives better as well. I’ve worked all my life but I always made sure I had a lot of life insurance. It’s been a priority in my life.”
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