Single mothers lack adequate life insurance
LIMRA, a worldwide research and consulting company, recently released a report showing that almost two-thirds of single mothers owned life insurance. This figure, which was higher than ownership levels for all women (57 percent), was a surprise to researchers. Despite these high ownership levels, the majority of single mothers often are underinsured. Only a third were confident that their families could cover expenses well into the future.
Its not just single mothers who lack insurance
Single mothers are not the only parent group that is lacking proper insurance coverage. The 2011 Genworth Financial Lifejacket study discovered that 69 percent of single parents did not have life insurance coverage and the recent Study of the American Dream by Metlife reported that 45 percent of families could not cover their expenses for more than a month if they lost their income. This insurance gap puts families at risk if a parent suddenly dies.
Single moms have priorities higher than life insurance
According to LIMRA, single moms do not reflect the young, unemployed, living-in-poverty stereotype. Their figures reveal that eight out of ten single mothers are 25 or older, half are divorced and 25 percent make more than $50,000 a year. Even though these middle-class moms realized they were underinsured, only a fourth of them were planning on upping their life insurance in the next year. The majority cited other financial priorities that affected their discretionary income. Saving for college and paying down debt are two of the major reasons single mothers cannot afford to buy life insurance coverage.
In addition to having more pressing financial issues, single mothers often are concerned that working with a financial professional is too expensive. LIMRA's study found that over 70 percent of mothers felt that they could not afford the fees involved with financial services professionals. The Genworth study concluded that single parents just don't have the time and in many cases are overwhelmed by the complexity of life insurance. As a result, they did nothing to seek affordable life insurance.
Life insurance tips
- Buy whatever coverage you can afford now and add additional coverage as your income grows.
- Determine what coverage you think is appropriate and how much protection you are interested in before you seek a life insurance quotes.
- Educate yourself on the various types of coverage so you are familiar with the terms an insurance professional will use.
- When shopping for insurance, don't be afraid to ask questions about things you do not understand.
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