Women often rule the roost when it comes to household money matters. They maintain the family budget, they pay the bills and so on. According to Elizabeth Duke, a governor of the Federal Reserve System, "women have long had substantial responsibility for family finances."
One of those areas of responsibility is insurance. Especially if children are involved, women tend to be more proactive about grabbing the insurance reins, according to Jacquette Timmons, president and CEO of Sterling Investment Management and author of “Financial Intimacy: How to Create a Healthy Relationship with Your Money and Your Mate.”
“I don’t know if it’s stereotypical or not, but that’s what tends to happen from what I’ve seen,” Timmons says.
Dr. Sandra Nurse-Bertie backs up Timmons' observation. Nurse-Bertie makes all the insurance decisions for her husband of 15 years and their two children. It’s been that way since they got married.
“If it were left up to my husband, we probably wouldn’t even have insurance,” Nurse-Bertie says. “He is not interested in making decisions about insurance.”
A tip for wives
For women married to men who've washed their hands of insurance matters, one insurance agent advises them to create a picture with their emotions and concerns.
“There is a resounding effect on the husband's decision if their wives express how they will feel if they were to pass away and their standard way of living was to be gravely affected -- along with their dreams -- because of his headstrong mentality,” says Bryan Roberts, an agent at New York Life Insurance Co.
Although such discussions can be emotionally charged, people should make it a priority to address household insurance needs, Roberts says.
'Proceed with caution'
With women frequently driving insurance decisions, family coverage typically becomes more extensive. For instance, the woman wants to make sure the couple has enough money (maybe in the form of life insurance) to take care of their kids if something happens to either of them, Timmons says.
“Left to himself, my husband would only buy what was required by law,” Nurse-Bertie says. “Price would be the determining factor for my husband with insurance.”
Since her husband is not interested in insurance, the task falls to Nurse-Bertie, who describes herself as more cautious than her spouse.
“I am more detail-oriented,” Nurse-Bertie says. “I usually research everything and proceed with caution. He is more spur-of-the-moment. He doesn’t even think insurance is important; it’s not a high priority for him."
Nurse-Bertie is so cautious that now she relies on advice from experts as opposed to figuring it all out on her own. And that's a wise move. As an example, American women generally lack knowledge when it comes various types of life insurance policies and their benefits, according to a survey by Penn Mutual Life Insurance Co.
Lack of proper insurance coverage
Most couples are underinsured if they don’t have any kids, according to Timmons.
“I think a lot of people think they don’t have kids so they don’t have to worry,” Timmons says. “They assume life insurance through their employer is sufficient for the needs they have. Supplemental insurance is not something that comes into play unless kids are involved.”
An actress/surgeon couple coached by Timmons was underinsured. For instance, it never dawned on the surgeon to have disability insurance.
“He’d been a practicing surgeon for quite some time and the thought never occurred to him,” Timmons says. That is, until his wife became pregnant.
The best policy for buying insurance
Kim Bourne, a financial planner with Playfair Planning Services, suggests following these guidelines when making insurance decisions, whether you're the woman or the man of the house:
•Identify your values and goals.
•Figure out the financial and emotional consequences if insurance isn't purchased.
•Set priorities for which coverage should be purchased and in which order.
•Obtain quotes for individual and group insurance options.
•Determine how little or how much insurance you can afford.
•Get objective professional advice to ensure you understand what you're buying.
Timmons says many people depend on the insurance choices that already have been made by their employers (health and life insurance, for example) or they're letting their insurance companies or insurance agents take the lead, according to Bourne.
“Many people do not even know what they have or what they are purchasing or replacing,” Bourne says.
Timmons recommends evaluating your insurance portfolio at least once a year.
“I don’t see people doing an annual review for changes that may have occurred during the year,” she says. “Maybe they made changes for their first born, but did they do it when their second child came along?”