The topic was recently batted around on Consuelo Mack WealthTrack, the personal finance and investing program that airs on public television stations around the country.

Mack’s discussion with InvestmentNews contributing editor Mary Beth Franklin and certified financial planner Erin Botsford, chief executive of the Botsford Group, began by covering familiar territory.

The show noted, for example, that 50% of women fear becoming a bag lady and that 18% of divorced women over 65 are living below the poverty level.

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But Franklin grabbed my attention when she said there's been an uptick in life insurance purchases by women over 50. “The old idea of life insurance was you had it when your kids were little, so if anything happened, your survivors could pay off the mortgage and send the kids to college,” she said. “So, traditionally, once you got into your mid-50s, a lot of people gave up their life insurance.”

But, Franklin added, “I’m starting to see more 50-plus people either keeping their life insurance or buying it because they look at their kids who have lived through this recession and say, ‘They will never have what we had and I want to be able to provide for my adult children.’”

Some planners call this the “leaving a legacy” rationale for owning life insurance in midlife. “It’s the next stage of helicopter parenting,” Lisa A.K. Kirchenbauer, a certified financial planner with Omega Wealth Management in Arlington, Va., told me.

I was also struck by Botsford's comments on why older women might want their husbands to keep holding onto their life insurance policies where the wives are beneficiaries – to compensate for the possibility that the men’s health woes might sap the couples’ savings.

“Keeping a life insurance policy on your husband is very important,” she said. “If you do exhaust some of the family resources because he gets sick or goes into a nursing home, then you’ll have the life insurance to help with the longevity risk that women have.”

After her program aired, Mack told Next Avenue: “Anecdotally I have known several women where their spouses' life insurance has made the difference between a secure and insecure financial future.”
One friend's husband, Mack said, a “healthy” 70-year-old was going to stop paying the premiums on his policy because the couple’s children were grown and he thought he had enough saved for retirement. When he died unexpectedly and his wife lost her regular paycheck, “his insurance policy, which she had insisted they maintain, enabled her to keep her home and live comfortably.”


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Source: Forbes.com