Same needs, but is a different strategy needed?
New research from LIMRA. Visit here.
March 2, 2017 — Six in 10 Black American households (approximately 9.9 million) indicate they are fairly or very likely to buy life insurance for themselves or another member of their household in the next 12 months, compared to just 45 percent of the general population.
In a similar LIMRA study conducted in 2010, Black Americans proved to be more receptive to buying life insurance at that time than in the past. Recent study shows that Black Americans are purchasing life insurance in record numbers (75 percent in 2016).
Segments of the Black American population who are the most likely to buy include those under age 54 in all income brackets, and particularly couples with children (72 percent).
LIMRA’s research finds nearly half (47 percent) of Black Americans feel that their household members should have more life insurance coverage, including one-third of insured Black Americans who say they will face financial problems almost immediately should the primary wage earner die. The average amount of years of replacement coverage for Black American households is 2.7 years, compared to an average of 3 years for the general population.
Black Americans say some of reasons preventing them from buying life insurance include: having other financial priorities and having a difficult time deciding what to buy. Two-thirds say they find it difficult deciding what type and how much coverage to purchase.
In 2010, the study’s author, Nilufer Ahmed expressed that “There is a great need for retirement-related education” in order to help Black Americans make decisions and set financial priorities in the income replacement years. Six years later, after conducting the Black American Study, she echoes the same sentiment.
Excerpts from the LIMRA study
- African Americans place greater emphasis on the goal of having adequate life insurance and are twice as likely to consider purchasing life insurance for themselves or for someone else in the household compared to the total U.S. population, according to a new LIMRA study.
“LIMRA’s research on the various ethnic and racial groups in the United States indicates that while these consumers have similar needs for financial products as compared to the general population, the strategies for reaching out to them are different,” said Nilufer Ahmed, senior research director, LIMRA Markets Research. “Our findings indicate that African Americans are more receptive to buying life insurance today than in the past and that they have a more positive attitude towards life insurance companies and their field representative than the general population.”
- Almost half of African Americans believe that they may have to retire later than they had originally planned and a third of African Americans (as well as the general population) who have not yet retired admit that they don’t know what their retirement income will be. Equally notable is that African Americans are much more interested in converting some of their savings into guaranteed lifetime income (69 percent) like an annuity than the general population (56 percent).
“There is a great need for retirement-related education,” said Ahmed. “While companies may already have retirement-related education, calculators and tools on their Web sites, they need to make sure that African Americans are aware of these resources by providing links from Web sites that African Americans frequent.”
LIMRA’s Black Americans: U.S. Life Insurance Ownership study, conducted in early 2016, is based on a sub-sample of 456 Black American households from the original sample of 4,197 households. The study, to be released March 2017, examines data on U.S. life insurance ownership levels, buying patterns, and attitudes of the Black American market.
For more information on this topic, view LIMRA’s infographic, Black American Life Insurance Ownership: Discovering New Opportunities (2017).
