Study: A cultural proclivity toward permanent life coverage
Feb. 11, 2016—According to new LIMRA research, half of Chinese-Americans own individual life insurance, compared with 39 percent of the U.S. general population.
“The study found Bilingual Chinese-Americans were more likely to own individual life insurance and more likely to own permanent life insurance compared with the other segments of the Chinese-American market,” said Nilufer Ahmed, Ph.D., senior research director, Insurance Research.
“Our research examined three language-acculturated segments of the Chinese-American market – those who speak primarily Chinese, those who speak primarily English and those who are bilingual.”
A savings vehicle, in addition to protection
The report, Understanding the Chinese-American Market, found that insured Chinese-dominant consumers are more likely to own permanent life insurance than English-dominant Chinese-American consumers (46 percent vs. 32 percent) and consider life insurance as a savings vehicle, as well as a way to protect their families. Overall, insured bilingual Chinese-Americans are most likely to own permanent life insurance.
The study uncovered differences in why Chinese-Americans buy life insurance compared with the general U.S. population. While 8 in 10 Chinese-Americans said replacing income of the primary wage earner is the most important or second most important reason for buying life insurance, less than 6 in 10 American consumers list replacing income as a reason to buy life insurance. A third of Chinese-Americans buy life insurance to pay for their children’s education, compared with just a quarter of the general population.
“Chinese-American households are more likely to be multi-generational and therefore, maintaining the family’s income is more important as more people rely on that income,” Ahmed commented. “In addition, 3 in 10 Chinese-Americans have immigrated to the U.S. since 2000. Like others who have immigrated in the past, having the means to provide a good education is very important to families as they settle in the U.S. So it is not surprising that education is a higher priority for this market.”
According to the study, three quarters of Chinese-American consumers prefer to purchase life insurance face-to-face with a financial professional. Only about half of the general population prefers meeting with a financial professional. LIMRA found many Chinese-Americans felt buying life insurance was somewhat difficult (7 in 10) and that professional financial advice is necessary for the purchase of life insurance (6 in 10).
“Chinese-Americans place great value on brand recognition and referrals,” noted Ahmed. “Companies can take steps to increase their brand recognition at the local level so that their financial professionals can benefit from company name recognition when they enter new markets. This would be of particular help to Chinese-dominant and bilingual consumers. For them “representing a well-known company” is the most important characteristic they look for in financial professionals.