life insurance question

I notice that when I run a survivor report showing what happens if my wife were to die four years from now, my standard of living goes down (about 4 or 5k per year) from what it is if we are both alive--and then it goes way up in my retirement beyond the per-person amount I'd have if we both are alive. So obviously I'm severely borrowing constrained if the wife die in the next few years.

But shouldn't the program recommend term insurance so that my standard of living does not go down--even in immediate years--were my wife to die? As is, the program does not recommend that my wife have any life insurance. Or is it supposed to allow the living standard to go down some? Or in other words, shouldn't it take account of the fact that I'm going to be borrowing constrained until I retire and adjust my term insurance to meet that economic need? Instead it seems to be saying--hey, just hold on until you retire and then you'll be much better off than you would have been had you wife been alive. But for now, you'll have to lower your standard of living. Is it possible the program knows about the cash value of her pension and that I would be receiving that cash value (even though I have no survivor benefits assigned to me when she dies--though I do get to keep the compulsory 60k cash that she has paid in. That would cover it. But how would the program know about this? )

I also notice that my Medicare Part B payments disappear in my survivor report.

And what is "Earnings Reduction" in the Survivor Report in the Social Security page? At age 64 and 65 my report shows about 21k in earnings reduction for those two years.

Dan