METLIFE STUDY FINDS DEATH OF SPOUSE DRAMATICALLY UNDERMINES FAMILIES’ FEELINGS OF FINANCIAL SECURITY

METLIFE STUDY FINDS DEATH OF SPOUSE DRAMATICALLY UNDERMINES FAMILIES’ FEELINGS OF FINANCIAL SECURITY

NEW YORK, NY September 16, 2009

A husband’s or wife’s premature death can have a long-term financial impact on the surviving spouse. Even five to seven years after their loss, more than one-third (36%) of individuals surveyed say they remain financially vulnerable. The amount of the life insurance proceeds can make an exponential difference in the strength of a safety net, according to findings released today from MetLife’s Study of the Financial Impact of Premature Death. For example, about half (53%) of widows and widowers who received three or more years of household income in life insurance benefits felt financially secure in the year following their loss. However, that percentage drops to 27% for beneficiaries receiving a lesser amount and to only 11% for survivors who collected no life insurance proceeds.

The study also highlights a gender gap with regard to life insurance ownership. In general, wives who received life insurance benefits obtained an amount equal to about two years of household income. However, husbands received even less – only one year’s worth of household income. Approximately three-quarters of beneficiaries did not feel that the amount of the life insurance proceeds they received amply met their needs. These findings underscore the fact that many Americans are underinsured, particularly women.

While the study found that eight out of ten survivors had to make financial adjustments, life insurance may help mitigate these actions. For example, of the individuals who participated in the study:

• 42% who received no life insurance benefits said they had to borrow money from friends and family compared to 25% of those receiving benefits.
• 36% who received no life insurance benefits relocated residences compared to 23% of survivors receiving benefits.
   

"While thinking about one’s own death can be difficult, taking steps to help ensure a family’s financial security can be easy. A basic step – which people often overlook – is to take advantage of opportunities provided by employers to obtain additional life insurance coverage at group rates," says Graham Cox, vice president, MetLife Life Product Management.

Many employers allow their employees to purchase supplemental life insurance coverage at competitive group rates during the fall open enrollment season and often at additional times of the year. In addition to purchasing life insurance at work, individuals should also consider working with a financial advisor that can help them further understand the importance of both group and individual life insurance as part of their overall financial plan. Consumers can get a better understanding of how much life insurance coverage they need and what types of policies might be most appropriate for their circumstances by using MetLife’s free online Life Insurance Selector tool at www.metlife.com/simplified.

"Consider this divergent perspective – according to MetLife’s 7th annual Employee Benefits Trends Study, only 26% of working Americans think life insurance is an important workplace benefit. However, for families who receive the proceeds it can make a world of difference," adds Cox.