MetLife Study Finds Many Working Women May Be Short-Changing Themselves & Their Families When It Comes to Their Life Insuranc...
September 08 2011 - 10:21AM
Business Wire
While four in five employees today believe their life insurance
coverage is adequate, 45% of working women and 28% of working men
with life insurance have not evaluated their needs since obtaining
their first policy, potentially leaving themselves and their
families financially vulnerable in the event of a premature death.
This according to MetLife’s 2011 Insurance Literacy Study, released
today.
Working women with life insurance are also nearly twice as
likely as men (21% vs. 12%) to acknowledge they don’t know how much
coverage they have and are also more likely to underestimate how
much coverage might be needed. While a good starting place for life
insurance coverage is typically outstanding debt plus five years of
salary, 54% of women and 47% of men believe coverage equal to
outstanding debt and only three years of salary or less will be
adequate. The study also found that only one in four men or women
considered outstanding debt when calculating their life insurance
needs yet 52% want their death benefit to cover these
obligations.
Gender Expectations
Men and women have different desires for what they want their
insurance policies to cover. Nearly three-quarters (73%) of married
men say their number-one expectation for their life insurance
coverage is to pay for future living expenses for their spouse,
compared to 47% of married women. For married women, the number-one
expectation is to cover their final expenses (69% versus 55% of
married men). However, both married men and women express nearly
identical levels of interest in protecting the financial futures of
their children.
“Honestly assessing your expectations for your life insurance
policy is an important step to ensuring you have the right amount
of coverage. There’s a significant difference between having enough
coverage simply to pay for final expenses and also having enough
coverage to meet the ongoing needs of a family with children,” said
Todd Katz, executive vice president, U.S. Business, MetLife. “Take
the time now to learn the details of your life insurance policy so
that your desires for your family’s financial security can be
matched with the most appropriate features and coverage levels. And
also take the time now to make sure beneficiary information is
up-to-date.”
“It is so important to be an educated consumer when it comes to
developing a strong financial plan. Women should not only 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 long-term
negative impact for the survivor well into retirement,” said Cindy
Hounsell, President of the Women’s Institute for a Secure
Retirement.
Policy Features to Match
Needs
The study found that more than one-fourth of those interviewed
are unfamiliar with the basic features of their own life insurance
policies. For example, nearly one quarter (24%) of employees who
say they have term life insurance believe that this coverage offers
financial protection for an unlimited amount of time. In fact, term
insurance often offers financial protection for a defined time
period such as 10, 15, or 20 years, or if provided through an
employer-maintained group policy, for the duration of employment.
At the end of these time periods, the term coverage typically may
be continued, but usually with much higher premiums. In addition,
28% of those employees who own permanent life insurance are unaware
that this coverage can build cash value as they pay their premiums.
Permanent life insurance policies can be used to accumulate,
protect and transfer wealth. Term policies are an easy and
cost-effective way to get life insurance protection in the
relatively short run.
Employees may also not be leveraging life insurance as
effectively as they could to meet their needs. Approximately
one-third of employees with coverage do not realize that life
insurance, in addition to a death benefit, can be a strategic
method to supplement retirement benefits and aid in estate
planning.
Katz added, “As a first step, people should familiarize
themselves with their employer’s life insurance benefit. There may
be “living benefits” available such as will preparation or powers
of attorney in addition to beneficiary assistance with estate
resolution. However, don't assume that what you have at work is
enough. Take time to fully understand your needs and supplement
your workplace coverage as needed. Getting the right amount of
insurance coverage is less expensive and less complicated than many
think. Making use of coverage calculators and trusted advisors can
help.”
For more information about addressing life insurance needs,
visit www.metlife.com/lifeinsurancecalculator or speak with a
financial advisor.
Methodology
MetLife commissioned IBOPE Zogby International to conduct the
MetLife Life Insurance Literacy Study. The survey sample consisted
of 500 telephone interviews of employed adults who have life
insurance. The interviewing was conducted from 6/22/11 to
7/1/11.
About MetLife
MetLife is a subsidiary of MetLife, Inc. (NYSE: MET), a leading
global provider of insurance, annuities and employee benefit
programs, serving 90 million customers in over 60 countries.
Through its subsidiaries and affiliates, MetLife holds leading
market positions in the United States, Japan, Latin America, Asia
Pacific, Europe and the Middle East. For more information, visit
www.metlife.com.
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