MetLife’s 2011 Insurance Literacy Study found 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, according to MetLife, the survey found 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.
The survey indicates 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.
In addition, 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 this coverage offers financial protection for an unlimited amount of time when 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. Twenty-eight percent of those employees who own permanent life insurance are unaware that this coverage can build cash value as they pay their premiums.The survey sample consisted of 500 telephone interviews of employed adults who have life insurance. The interviewing was conducted from June 22, 2011-July 1, 2011.
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