Senior Women from Baby Boom Generation Exercise Clout in Life Settlement Transactions
Financial advisors are taking note of the fact that senior women are beginning to exercise more clout as it relates to financial matters. As the population ages and female spouses outlive their husbands, senior women from the baby boom generation are becoming more engaged in decisions involving their financial future.
While male spouses have traditionally been the primary decision maker involving the couple’s finances, the financial services industry has begun preparing for the reality that senior women, (with a combined net worth of $19 Trillion), are becoming the new economic powerhouse. According to the Wall Street Journal, 48% of estates worth more than $5 million are controlled by women, compared to 35% controlled by men.
At Asset Life settlements, we are already seeing this gradual shift occur as it relates to life settlement transactions initiated by senior women, especially those from the baby boom generation.
The rising economic clout of women is perhaps one of the most significant economic shifts of recent decades, which is why examining the data and understanding the financial planning needs of this demographic should be a priority.
Senior women outlive spouses
First of all, women already make up more than 166 million (more than half) of the U. S. population. As illustrated by the following data, the tide will soon begin to shift in terms of greater numbers of senior women taking charge of their financial futures.
Data from the U. S. Census Bureau indicates that the percent of women who live in a household without a spouse increases from 40% to 84% from age 55 to 85.
According to a recent USB Investor Watch survey, 78% of women in the U. S. believe they will outlive their spouse. However, 60% of women do not engage in the most important aspects of their financial well-being, such as investing, insurance, retirement and other long-term planning.
Understanding the needs of senior women
Women from the baby boom generation are typically healthier, more educated and financially savvy than women from their parents’ generation.
Born between 1946 and 1964, baby boomer women represent a growing segment of the population that had successful careers and their own investment portfolios. Many received inheritances from their parents and/or their husbands, which is a major factor in the amount of wealth they control. As a result, they are more financially empowered and engaged in decisions.
Case in point
At Asset Life Settlements, we recently brokered a life settlement transaction that was originated by the female spouse who is an attorney from the baby boom generation. Her husband owned excess life insurance coverage and they no longer needed the policy. So she took the lead in researching the options and choosing the best course of action.
After deciding that a life settlement was the most favorable option, she contacted our office and we worked with her in submitting the case to multiple secondary market buyers. In addition to spearheading the life settlement application, the wife was engaged in the process every step of the way and made the final decision to accept the highest offer.
Opportunity for financial and insurance advisors
Women have come a long way since colonial America when females were not permitted to own property. While the tide may be turning and more senior women are taking control of their financial matters, this gender shift will be a gradual process that occurs over time. In some cases, it will require much hand-holding by financial advisors.
According to AgeWave.com, only 14% of widows say they were making financial decisions by themselves before their spouse died. But once they are widowed, 86% stated they had to do so.
Some senior women who have recently become widows will be challenged as it relates to focusing on financial matters if they are still in the grieving process. That’s why financial and insurance advisors will continue to play a valuable role. From helping female clients choose the appropriate Medigap insurance plan, to deciding whether to sell excess life insurance coverage, advisors will be invaluable coaches.
As the secondary market for life insurance continues to gain traction, financial advisors will want to ensure the life insurance coverage for their senior clients is aligned with their lifestyle priorities. Often it may mean selling an obsolete policy to meet other needs.
If you would like to learn more about life settlements or have a potential case you would like to discuss, contact us at 1-855-768-9085.