Life Insurance Ownership Lowest Among Hispanics; Although Many Say They Need It
New Study Examines Hispanics’ Attitudes and Behavior Towards Life Insurance
A new study has found that Hispanics have the lowest rates of life insurance ownership when compared to Whites and African Americans. In fact, while 70 percent of Hispanic consumers agree that they personally need life insurance, only 54 percent of Hispanics say they own it. The gap is much narrower among other demographic groups. In comparison, 80 percent of African Americans and 67 percent of Whites agree they need life insurance, while 76 percent of African Americans and 62 percent of Whites own it.
These findings were released today by the nonprofit LIFE Foundation and LIMRA as part of the organizations’ “The 2011 Insurance Barometer Study,” a new, annual survey designed to increase understanding about consumer attitudes and behaviors regarding a host of insurance and financial planning matters.
“Far too many Hispanics lack adequate life insurance coverage and are leaving their loved ones financially vulnerable by not insuring themselves,” said Marvin H. Feldman, CLU, ChFC, RFC, president and CEO of the LIFE Foundation. “Life insurance has never been as easy or inexpensive to buy, yet millions continue to put off getting coverage that they, by their own admission, say they need.”
Of the Hispanics who have life insurance coverage more than one in five (22 percent) feel that their coverage is inadequate. When asked why they do not own more, the top reasons Hispanics cite are having other financial priorities (92 percent), life insurance being too expensive (83 percent), not being sure of how much or what kind to buy (74 percent) and not having been approached by anyone (58 percent).
A majority (69 percent) of Hispanics strongly agree that the main reason to buy life insurance is because of love for their family. The top reasons Hispanics give for owning life insurance are to cover burial and other final expenses (87 percent), help replace lost wages/income of a wage earner (75 percent), transfer wealth/leave an inheritance (75 percent) and pay off a mortgage (63 percent).
“Research like this is important to provide a better understanding of what impacts people’s decision to purchase life insurance and for us to recognize how the insurance industry can do a better job of helping meet the evolving needs and preferences of those who are underserved,” added Feldman. “This month, we have designated September as Life Insurance Awareness Month to encourage everyone to reach out to local insurance agents in their communities and learn more about the benefits this type of insurance can provide to families.”
Additional findings from the research:
Hispanics Want to Understand What They are Buying. When asked about important factors related to the purchase of life insurance, understanding what they are buying ranks highest among Hispanics (27 percent), followed by getting the proper amount of coverage (22 percent), and getting coverage that is guaranteed for life (19 percent). Only 16 percent of Hispanics say that getting the best price is the most important factor.
Turning to Technology to Help with Life Insurance Purchase. The research found that across all demographic groups, people are increasingly turning to the Internet for help in making life insurance purchases. Although two thirds of all consumers still prefer to buy life insurance face-to-face from an insurance or financial professional, Hispanics, more than any other demographic group, prefer to purchase a policy direct from a company via the Internet (23 percent compared to 16 percent of Whites and 15 percent of African Americans). When asked how they would use the Internet if they were about to purchase life insurance, 60 percent of Hispanics say they would research it online, but ultimately buy from an insurance professional. Roughly one in four (27 percent) would research and complete the process online and only 13 percent would not use the Internet at all.
Financial Concerns. When asked about common financial concerns, 41 percent of Hispanics say they are extremely or very concerned about having money for a comfortable retirement, followed next by paying for medical expenses (40 percent). Even though many Hispanics do not have any life insurance or are inadequately insured, only 31 percent say they are extremely or very concerned about dying prematurely and leaving family members in a difficult financial situation.
For more information on Life Insurance Awareness Month, life insurance and how to assess your needs, please visit www.cosaspasan.org.
About The Insurance Barometer Study
The online survey was fielded from Feb. 3 – 8, 2011 by Harris Interactive. The 2,051 respondents were between ages 18 and 75 and shared or were the decision maker for financial matters in the household. The margin of error in this study is +/- 2 percentage points or less. The nationwide Insurance Barometer Study is the first in a series that LIFE and LIMRA intend to conduct annually to better understand the public’s opinions, attitudes and behaviors regarding life and health insurance, as well as more general financial planning matters.