Replacing Mommy Would Cost 'A Small Fortune'
March 15, 2013 by Cyril Tuohy
As many as 43 percent of adult women have no life insurance, according to the Insurance Information Institute, citing a nationwide poll by wholesaleinsurance.net, an industry news and information resource.
Among those women covered by life insurance many are severely underinsured, carrying only one-fourth of the amount that would likely be needed by their policies’ beneficiaries, the industry group said in a release.
“Ironically, 100 years ago women weren’t even able to buy life insurance,” said Loretta Worters, vice president with the Insurance Information Institute, in a statement. “Today, women can protect their finances, but they aren’t buying the coverage or, if they are, it isn’t enough.”
In the United States, women have made big economic strides over the past 30 years. Many now are more educated and often better paid than their spouses. Yet their life insurance coverage hasn’t kept up, the latest poll numbers indicate.
Women who serve as the family’s primary breadwinner carry 31 percent less life insurance than their male counterparts, the survey also found. This despite the fact that in 2007, more than a quarter of wives were earning more than their husbands in dual-income households, and despite the fact that women as a group live longer than men.
Replacing mommy would cost “a small fortune,” Worters said, particularly if she were underinsured by an inadequate life policy or lacked coverage altogether.
“What would happen to the family if the mom weren’t around?” Worters asked. “Who would manage the day-to-day housekeeping, the laundry, driving kids to and from their sports activities?”
Life policies have a variety of uses. They serve to replace income for children and other adults who are dependent on a breadwinner. The policies can also pay for the cost of funerals, burial, probate and estate administration. They can be used as an inheritance and increase charitable contribution limits due to their tax advantages. Life policies can also be used as tax-advantaged savings vehicles that build up cash value.
Cyril Tuohy is a writer living in Pennsylvania. He has covered the financial services industry for more than 15 years. He has also written about food, restaurants and travel. He can be reached at cyril.tuohy@innfeedback.com.
