a snapshot: women and life insurance research, reasons, remedies beth hirschhorn senior vice...
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A Snapshot: Women and Life InsuranceResearch, Reasons, Remedies
Beth HirschhornSenior Vice President and Chief Marketing Officer, MetLife December 3, 2009
Workplace benefits matter…a lot
• Majority of Americans now report obtaining a majority of their financial services through the workplace
• Post-economic downturn, 41% of employees consider workplace benefits the foundation of their financial safety net (up from 33% earlier in the year)
• Working women, in particular, placing a greater value on comprehensive workplace benefits programs
MetLife Study of Employee Benefits Trends, 2009
3LIMRA: Trends In Life Insurance Ownership Among US Individuals, 2006.MetLife Employee Benefits Trend Study 2008
Concern, intent don’t translate to action
Very concerned with financial security in the event of premature death
66%
52%
Women
Men
Have taken steps to identify household need for life insurance
56%
65%
Women
Men
Group life insurance ownership among individuals, 2006
36%
45%
Women
Men
“If your spouse were to pass away before you/If you were to pass away before your spouse, do you think it would leave you/your spouse financially…”
Source: Society of Actuaries, 2009 Risks and Process of Retirement Survey; (Among married Pre-retirees, 2009 n=293)
Most assume financial situation won’t change significantlyin event of spousal death
…better off16%
28%
Survivor = you
Survivor = spouse
…about the same63%
60%
Survivor = you
Survivor = spouse
…worse off21%
12%
Survivor = you
Survivor = spouse
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Survivors of premature death are often financially devastated
MetLife Premature Death Study 2009
Those Most Impacted
• Younger (30-50)
• Women
• Children under 18 living at home
• Spouse primary/equal provider
Premature death survivors noting devastating / major
financial impacts
2 in 3Premature death survivors who thought
amount of life insurance they had was inadequate
2 in 3
6MetLife Premature Death Study 2009
Most common use of death benefit:Pay for funeral (77%)
Financial pressures lead to drastic lifestyle adjustments
Report at least 3 financial adjustments2 in 3
Report at least 1 financial adjustment4 in 5
70%
Cut discretionaryspending
45%
Took money fromsavings or retirement
24%
Had to move
7MetLife Premature Death Study 2009
Premature death survivors who felt financially secure
Financial and lifestyle effects were long-lasting
Prior to death 50%
1-2 years after 35%
2-5 years after 22%
5-7 years after 23%
“Putting the children through college was very hard, and I had
to tap into funds I'd saved for retirement.”
“We went from financially secure to being unable to even eat without food pantries…
It's been a nightmare. I keep waiting to wake up, but never can.”
“Everything in my life changed financially. The life insurance death
benefit was miniscule and only helped with a couple of small bills.”
“Of course, the income is less than half of what it was, but the monthly
debts are the same or higher.”
“He had a NINE HUNDRED DOLLAR insurance policy, our apartment was part of
his salary package, and we had to move almost immediately after his death. I was left
with a 21 month old and no place to live.“
In your own words, what, if anything, would you say was the biggest financial adjustment that your family had to make as a results of your spouse’s death?
Survivor quotes underscore devastation
MetLife Premature Death Study 2009
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Group life isn’t the problem, underinsurance is
MetLife Premature Death Study 2009
How much group life insurance protection did survivors have?
Median coverage amount:1 times income
10
Why underinsurance persists despite a well-designed product
• Functions well, right amount of access and ease. Not seen as a problem by employers, employees or providers
BUT…
• Employer-paid model has never been consumerized
– Delivery and enrollment have remained largely unchanged
• Employees don’t see the connection between coverage and salary
– Typical quote, “Is this a multiple amount of my annual salary?”
• People aren’t getting professional advice
– Women twice as likely to get advice from friends than call agent/advisor
• Not perceived as a mission critical benefit, like health care and 401(k)
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The remedy
• Recognize group life provides an essential safety net for employees
• Keep the focus on how much protection the employee is getting
– A good needs assessment tool goes a long way
– So does an off-cycle group life “campaign”
– No substitute for professional advice
• Experiment with 401(k)-type auto enrollment / defaults
• Room for improvement for part-timers, dependents and portability
• Talk to people about life insurance in language they understand