Everyone reading this article started off with a mother.
About 4 million U.S. women will have children this year, and more than 1.3 million married mothers with children 6 years old and under have annual household incomes over $100,000, according to the U.S. Census Bureau.
Most new mothers know that giving birth will lead to changes in household finances and insurance needs.
But, in most cases, “they absolutely spend more time thinking about their strollers or their cribs” than thinking about insurance and other financial matters, says Dianne Nolin, a financial planner at Legacy Advisors L.L.C., Tysons Corner, Va.
Gerber Life Insurance Company, White Plains, N.Y., makes heavy use of print advertisements, direct mail and the Web to encourage mothers to buy whole life insurance for their children and term life insurance for themselves.
MetLife Inc., New York, and some other insurers have added financial advice pamphlets for parents to their libraries of consumer education materials.
Many general print and television insurance advertising campaigns remind parents that having children affects their insurance needs.
But, aside from the Gerber Life effort, few of the marketing and distribution campaigns seem to reach out to pregnant women and new mothers as vigorously as campaigns for baby food, diapers or $750 Bugaboo strollers do, experts interviewed say.
Emily Viner, director of agency distribution and development at Guardian Life Insurance Company of America, New York, says she was surprised by the lack of attention she got from financial services companies when she had her 2 daughters, back in the mid-1990s.
“It would have been nice if there were marketing at all,” Viner says.
Life insurers and financial professionals should be trying to do more to educate women who have or want to have children about the critical importance of life insurance and other insurance protection products, says Patty Reiners, an assistant vice president at Ameritas Direct, the direct marketing arm of Ameritas Corp., Lincoln, Neb.
“Someone once said to me, ‘You have to have a car seat to take your baby home from the hospital,’” Reiners says. “‘You should be required to have life insurance as well.’”
Perhaps because society and the financial services industry are so concerned about the looming retirement of the baby boomers, the supply of public statistical information about mothers and women who want to have children tends to be spotty.
Packaged Facts, New York, estimates U.S. parents spend a total of about $29 billion, or about $1,500 per infant or small child, per year on home furnishings, accessories, clothing and toys for infants, toddlers and preschool children.
But when Aetna Inc., Hartford, and the Financial Planning Association, Denver, sponsored a 2005 survey of 500 pregnant U.S. women, they found that only 56% had tried to create a new family budget, and only 29% had spent more than an hour reviewing their health benefits.
Anecdotally, financial professionals in the trenches say even new parents in high-income households need help.
Today, “there are fewer and fewer agents,” says Edward Kelly, a financial advisor in Torrance, Calif., who is affiliated with a unit of Ameriprise Financial Inc. “People are hungry for information, and most people are grossly underinsured.”
How should life insurers and financial professionals go about serving moms?
One important step is to recognize that would-be mothers and mothers are a diverse group of individuals with diverse needs, experts interviewed say. Single mothers, mothers with low-income husbands, mothers with wealthy husbands, mothers with frail elderly parents, mothers of triplets, mothers with jobs outside the home, and mothers who plan to focus on homemaking will have different insurance and retirement planning needs.
Another good step would be to encourage women to come in for help with financial plans and the purchase of appropriate insurance long before they get pregnant, to avoid the possibility that pregnancy complications or random bad luck might make them uninsurable, says Rae Lee Olsen, a vice president at Vita Insurance Associates Inc., Mountain View, Calif.
In a perfect world, the initial plan would provide enough life, disability and health insurance to accommodate the needs of all children the mother hopes to have, Olsen says.
Any efforts to work with a new or prospective mother should start with a comprehensive of the client’s household finances, the financial professionals say.
“Most women find that they have no real idea of how costly it is to become a parent and have no solid sense of how their financial lives are going to change,” says Brette Sember, the author of Your Practical Pregnancy Planner: Everything You Need to Know About the Financial and Legal Aspects of Preparing for Your Baby.
In addition to health insurance for all members of the household, insurance arrangements probably could include: