Women short-changed when it comes to life insurance

September is Life Insurance Awareness Month (LIAM), and here is an example of the reasons which that consumer awareness campaign is so important. A recent MetLife study found that many women who work may be short-changing themselves and their families regarding their coverage of life insurance. According to the study, four out of five employees today believe their life insurance coverage is adequate, but 45% of working women and 28% of working men with life insurance have not evaluated their needs since obtaining their first policy. This can leave them and their families financially vulnerable in the event of premature death.

Working women with life insurance are also nearly twice as likely as men (21% against 12%) acknowledge that they do not know how much coverage they have and are also more likely to underestimate how much coverage they need. The study indicates that a good starting point for a life insurance coverage is generally the outstanding debt plus five years of salary. However, 54% of women and 47% of men believe coverage equal to their debt as well as three years' salary or less will suffice. While only one in four men or women considered debt when calculating their life insurance needs, 52% want their death benefit to cover these obligations.

I think the good life insurance number should be a minimum of 10 times income and could be much higher based on the family and economic conditions. Calculators, the LIFE Foundation Life Insurance Needs Calculator and Calculator-value human life can help you determine the exact amount of your situation and lifestyle.

The study also pointed out that men and women have different desires for what they want their insurance policies to cover. Almost three quarters (73%) of married men say their # 1 waiting for their coverage of life insurance is to pay for future living expenses for their spouse, compared with 47% of married women. For married women, the # 1 is waiting to cover their final expenses (69% against 55% of married men). However, men and married women express nearly identical levels of interest in protecting the financial future of their children.

"It is so important to be an educated consumer regarding the development of a sound financial plan. Not only women should consider life insurance coverage on themselves to protect loved ones but also encourage spouses or partners to have coverage as well. otherwise, the sudden loss of vital income may have a negative long-term impact for the survivor and retired, "says Cindy Hounsell, President of the women's Institute for a secure retirement.

Over a quarter of respondents to the study were unfamiliar with the basic features of their own life insurance policies. for example, 24% of employees who say they have term life insurance believe that this coverage provides financial protection for an unlimited period. in fact, term insurance provides financial protection for a defined period of time, such as 10, 15 or 20 years, or if provided through an employer group policy maintained for the duration of employment. At the end of these periods, the long-term coverage can be continued, but usually with much higher premiums. In addition, 28% of employees with permanent life insurance are unaware that permanent life insurance can create the cash value as they pay their premiums. the permanent life insurance policies can be used to accumulate, protect and transfer wealth.

Employees may also not be leveraging life insurance as effectively as they could to meet their needs. About a third of employees with coverage do not realize that life insurance, in addition to providing a death benefit, can be a strategic method to supplement retirement benefits and assistance in estate planning.

Consumer education is that the LIFE Foundation is all about. Use our resources to help you make informed decisions about life insurance to protect you and your family.