Insurance needs are likely to be underestimated by working women who tend to under value their financial contributions to their familes.
Working women tend to underestimate their financial value and reveal lower “insurance literacy” than men, according to a MetLife study that finds women are less likely to know how much coverage they have and more likely to low-ball their insurance needs.
“Women feel less confident than men about making financial decisions and, overall, tend to do more investment research, but their caution doesn’t always translate into adequate insurance coverage,” said Catherine McBreen, president of Millionaire Corner. “It may be that women, even those enjoying successful careers, tend to underestimate their financial value.”
Working women are nearly twice as likely as men to say they don’t know how much insurance coverage they have, and they are also more likely to underestimate the extent of their insurance needs, according to a study released this month by MetLife, one of the nation’s big three insurance providers.
Women also express different expectations for what they want their insurance policies to cover. Married men say their top expectation for life insurance is providing for their spouse, but married women say their number one expectation is to cover their final expenses. Both men and women express the same level of interest in protecting their children.
“It is so important to be an educated consumer when it comes to developing a strong financial plan,” said Cindy Hounsell, president of the Women’s Institute for a Secure Environment. “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.”
Understanding a household’s insurance needs and purchasing adequate insurance coverage is an important component of holistic financial planning. Life insurance can protect dependents from loss of income should one of a family’s providers die. MetLife recommends minimum life insurance coverage equaling outstanding debt plus five years of salary.
Long-term care insurance can pay for extended stays in a nursing home and protect a family from the devastating financial impact of a prolonged illness. Automobile insurance and home insurance not only protect against damage, theft and loss, but can also cover personal liability in the case of an accident.
About two-thirds of affluent investors with $1 million to $5 million in assets have purchased life insurance, but only 31 percent have bought a long-term care insurance policy, according to Millionaire Corner research conducted in December. The share of Millionaires with long-term care insurance is unlikely to grow significantly. Our research shows that only 10 percent of Millionaires say they are likely to buy long-term care policies in the next two years.