Why the sandwich generation may be underinsured

By Susan Rupe

The sandwich generation – adults who are caring for older family members while raising children – are already stretching their funds to cover expenses across multiple generations. But this age group also may be underinsured and have a misconception about the cost of life insurance and how it works as a financial safeguard.

Denise McCauley, president, chair and CEO of WoodmenLife, discussed this generation’s life insurance needs and how the industry can address them in a recent interview with InsuranceNewsNet.

“These are people who have a lot of stress in their lives,” she said. “They’re raising kids and have all the expenses associated with that. They’re also responsible for taking care of parents and that can also take up a lot of personal time – making sure they have groceries, preparing meals, getting them to doctor’s appointments.

“It also can put a lot of financial strain on them, depending on the situation. Members of the sandwich generation are helping to pay bills and ultimately supporting their parents through their end of life. All of that causes a lot of strain financially and emotionally. What we want to do is help families balance and we want to take away that stress. Life insurance is a great tool to help make sure those folks can have financial security when they’re being stretched to the max.”

Stress and stretched finances may not be the only reasons why the sandwich generation is underinsured, McCauley said. Many in this group have a misconception about how much life insurance costs. The belief that coverage costs more than it does prevents this generation from obtaining the protection they need, she said.

Another reason why the sandwich generation is underinsured is that they haven’t yet experienced a death in the family.

“A lot of times, people don’t understand the full extent of all the expenses they must cover as a result of a death,” McCauley said. “They probably think about paying for a funeral, for sure, but they need to know there is more than that involved. Life insurance is a great solution that provides peace of mind and avoids financial hardship. But the sandwich generation often doesn’t understand it plays a critical role to ensure their financial health in all states of life. And I think they're probably not aware that there are life insurance professionals who can help them find the best solution for them.”

Sandwich generation members need to have a conversation

Members of the sandwich generation also need to have a conversation with their parents about their final expenses and end-of-life wishes, she said.

“I think it's the conversation where an adult child sits down and says to their parent, ‘Hey, I love you. I want to make sure you’re taken care of like you’ve taken care of me. And I think it’s critical we have a conversation so I can support you and that I know what your wishes are as you age.’ I think that having that conversation come from a loving perspective is the best way to do it.”

WoodmenLife was founded in 1890 as a not-for-profit life insurance company, reinvesting its profits back into its mission, supporting members and communities.

McCauley said the insurer has participated in industry studies that examine the sandwich generation, as well as looking at its financial literacy education offerings and educating its sales force on how to reach this age group.

“We also are looking at new product offerings that go above and beyond final expense life insurance,” she said.

Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.