Social Security is the only form of life insurance covering most American children, an analysis by the Economic Policy Institute has found.
The debate over Social Security has focused primarily on retiree benefits and has largely neglected the survivors and disability portions of the program. The fact that two-thirds of retirees receive at least half of their income from Social Security has become well-known.
Yet many people seem unaware that about one in six Social Security beneficiaries receive survivor benefits as the spouses and dependents of deceased workers and another sixth receive disability benefits.
In 2003, some 1.9 million children received survivor benefits at an average of $603 per month, totaling $14 billion a year, EPI Research Assistant David Ratner and Research Director Lee Price wrote in a recent "Economic Snapshot." For many families, Social Security provides the only form of life insurance for their children, they said.
Analysis of the Federal Reserve's 2001 Survey of Consumer Finance shows that 31 percent of families with children under the age of 18 have not purchased life insurance in the private market. This translates into roughly 24.5 million children without life insurance other than Social Security.
Lower-income families are much more likely to lack private life insurance. In the lowest quintile (with incomes up to $16,500), 67 percent of families have no private life insurance for their dependents. In the second-lowest quintile, more than four out of 10 children have no coverage other than Social Security. Thus, Social Security provides the only form of life insurance for over half of children in families with incomes below $31,000, the EPI researchers wrote.
Even for families in the middle income quintile (with incomes between $31,000 and $51,000), more than a quarter have not secured life insurance in the private market.
Social Security provides essential income even for those with private life insurance because benefits from private policies are often quite modest, the EPI researchers added. Upwards of 58 percent of children live in families with $100,000 or less of life insurance protection, whereas Social Security provides a life insurance policy worth around $403,000 for the average young earner with a spouse and two young children.
For the typical family in the middle income quintile, $50,000 of life insurance protection pales in comparison to the coverage offered by Social Security survivor benefits, the researchers wrote.
This article is adapted from material that appeared on the UFCW website, www.ufcw.org
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Social Security is the only form of life insurance covering most American children, an analysis by the Economic Policy Institute has found.
The debate over Social Security has focused primarily on retiree benefits and has largely neglected the survivors and disability portions of the program. The fact that two-thirds of retirees receive at least half of their income from Social Security has become well-known.
Yet many people seem unaware that about one in six Social Security beneficiaries receive survivor benefits as the spouses and dependents of deceased workers and another sixth receive disability benefits.
In 2003, some 1.9 million children received survivor benefits at an average of $603 per month, totaling $14 billion a year, EPI Research Assistant David Ratner and Research Director Lee Price wrote in a recent “Economic Snapshot.” For many families, Social Security provides the only form of life insurance for their children, they said.
Analysis of the Federal Reserve’s 2001 Survey of Consumer Finance shows that 31 percent of families with children under the age of 18 have not purchased life insurance in the private market. This translates into roughly 24.5 million children without life insurance other than Social Security.
Lower-income families are much more likely to lack private life insurance. In the lowest quintile (with incomes up to $16,500), 67 percent of families have no private life insurance for their dependents. In the second-lowest quintile, more than four out of 10 children have no coverage other than Social Security. Thus, Social Security provides the only form of life insurance for over half of children in families with incomes below $31,000, the EPI researchers wrote.
Even for families in the middle income quintile (with incomes between $31,000 and $51,000), more than a quarter have not secured life insurance in the private market.
Social Security provides essential income even for those with private life insurance because benefits from private policies are often quite modest, the EPI researchers added. Upwards of 58 percent of children live in families with $100,000 or less of life insurance protection, whereas Social Security provides a life insurance policy worth around $403,000 for the average young earner with a spouse and two young children.
For the typical family in the middle income quintile, $50,000 of life insurance protection pales in comparison to the coverage offered by Social Security survivor benefits, the researchers wrote.
This article is adapted from material that appeared on the UFCW website, www.ufcw.org