Let's Make Life Insurance More Attractive to US Women

Swiss Re's Life & Health Sustainability goal is to contribute to the building of societal resilience by working with partners to grow sales with social impact in underserved communities, which includes US women.

The life insurance industry is not adequately attracting women in the US. It's time to think differently about how we serve them better.

Almost 70 million women in the US do not own any life insurance, and the trend is not promising, according to 2021 LIMRA research.

In fact, women’s life insurance ownership rates are the lowest they have been in a decade at 47% and have dropped every year since 2017. Compare this to male life insurance ownership rates which have hovered between 62% and 58% over the same period.  In addition, the current 11% divergence between male and female life insurance coverage should ring alarm bells. The fact that women are not purchasing life insurance at the same rate as men is a clear sign that our product offerings and distribution strategies need to be better tailored for women.

In response, Swiss Re has sponsored a 3-phased research study to better understand the life insurance needs of US women.¹

Phase 1 results show that life insurance ownership rates were as low as 26-27% for female segments that are cash strapped (26% of respondents), reliant on borrowing funds from family and friends if needed (18% of respondents) or spendthrifts focused on living for today (22% of respondents). These lower rates may be partially attributed to the fact that women are more economically vulnerable, making 83% of what men earn among full-time, year-round workers, primarily due to occupational segregation and unpaid hours of caregiving.  We also know that women, and especially those with lower incomes and women of color, were hit hardest by the pandemic and have experienced the slowest recovery.

Nevertheless, it should come as good news to the industry that about a quarter of women in these segments are already life insurance policy holders on a limited budget, so we ought not to quickly dismiss these segments as not worth pursuing.

At the same time, our preliminary results indicate that US insurers will have to think differently about products for lower-income ($30-75K) women represented in these segments.

Specifically, we uncovered two needs worth investigating further:

1) women want "living benefits" such as coverage for household expenses and childcare costs if they get sick or are not able to work; and

2) they need smaller policies with lower premiums in line with their lower incomes.

US insurers may need to consider new strategic partnerships required to distribute insurance products to America's lower-income women, especially for those not likely to ever encounter a financial advisor.

I’ll provide another update, once we release the results of phase 2 of our research, where we will dig deeper to understand how lower-income Black, Hispanic, and White women's needs compare and test some ideas for how and where best to serve them.

If you are interested in learning how you can make life insurance more affordable, accessible and available for women in the US, please contact me or your Swiss Re representative.