Women outlive men, but they may not fare so well financially after the death of their spouse.
Nearly half of women (49 percent) say their ability to make mortgage payments, save for college tuition, and pay bills would be adversely affected by the death of their spouse, compared to just 37 percent of men, according to a new survey by personal finance site NerdWallet. Women are also less likely to know the terms of their spouse’s life insurance policy (57 percent versus 69 percent of men) and less likely to find family financial documents in an emergency (32 percent of women versus 21 percent of men), the study of 2,000 married adults found.
The average life expectancy of Americans is at historic highs, with women outliving men on average by nearly five years (81.2 years versus 76.4 years for men), according to the latest data from the Centers for Disease Control and Prevention. “Couples appear ill-prepared to face this reality with sufficient life insurance coverage,” says John Kuo, senior strategy analyst at NerdWallet. “This is an area where the longevity gap, which favors women, collides with the pay gap, where men earn more.”
Most Americans who have life insurance know some of the basics of their policies — the name of their insurance company, names of beneficiaries, and where records are kept. But only 63 percent know the terms of their spouse’s policy, such as the length and amount payable. What’s more, about 1 in 4 couples have no life insurance at all, the survey found. “Couples need to plan and talk more about end-of-life financial preparation and final wishes,” Kuo says. “It’s not a pleasant conversation, but it’s a vital one.”
And those who do carry life insurance often don’t have enough, a separate study by personal finance site Bankrate.com found last month. Nearly half (47 percent) of insured respondents in a survey of 1,000 adults carry coverage of $100,000 or less and, of them, more than 1 in 5 have a benefit amount of $25,000 or less. Only 2 percent of those surveyed had $1 million or more in life insurance. Nearly half of all adults — married or single — have insufficient coverage to address the financial needs of their families, the study found.
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