Black Life Insurance Gap Continues

More than half (56%) of black Americans have life insurance, according to an insurance barometer survey conducted by LIMRA and Life, but that number is less than 75% of black Americans who believe they need life insurance. There is a difference of 19 points from %. happen.

In a recent interview, MDRT member Brenton Harrison shared some key insights that agents should always keep in mind when pursuing the African American market.

A barometer survey conducted last year found that African Americans were more likely to save money for an emergency, pay their monthly bills and mortgage, and leave their families in a difficult position due to premature death. It has been pointed out that there is a high possibility that they are quite concerned about whether they can be placed in a situation. .
Black people, like most Americans, are misunderstood about life insurance, which prevents them from getting the coverage they need, the study says. High premiums are the number one reason blacks don’t buy insurance, but the study found that blacks are more likely than the general population to overestimate the cost of life insurance (75% vs. 50%). They are also more likely to consider the coverage available through their employer to be adequate.

“…it is important that the advisor is willing to educate until the client understands and can identify why it is in their best interest.”
— Brenton Harrison, MDRT Member

Harrison serves clients of all races, but African-American households make up 80% of his clients. To work in this community, he said, he must understand two truths:

1.) Few organizations truly seek to serve the African American community.
2.) There were harrowing examples of inappropriate and predatory business practices among the attempted organizations. “Considering that most black households do not have the significant financial assets most businesses seek in prospective clients, the majority of African American prospective clients I meet And for those who did, the experience was often negative and characterized by a lack of trust in the person giving the advice,” he said. rice field.

Compared to their white peers, African Americans are often less well known for their insurance plans, investment opportunities outside of work, or even the importance of establishing a will and power of attorney. It’s important to establish, Harrison added.

“If the advisor is the first to present these topics, it is important that the advisor is willing to educate the client until they understand and can identify why it is in their best interest,” he said. Told.

The process of educating while building trust can lead to more transparent conversations, Harrison said. “Clients ask me what I make out of the products and services I have implemented, and why my recommendations are the best for them, even if there are more cost-effective options available. I wouldn’t be surprised either. Some people even want to know if my family and I use the same products and services before agreeing to move forward.”

fighting student loans

Most importantly, high-income African-American households are more likely than their peers to struggle with student loans and consumer debt, Harrison added. It’s not uncommon to meet ugly African Americans, who are high earners, but each owes over $400,000 in student loan debt.

They are also often financially supporting other family members, such as parents and siblings who have lower incomes. “This is a phenomenon I experienced firsthand. I grew up with high-income black parents who often supported two or three of his households besides ours,” he said.

These differences provide advisors with unique planning opportunities, Harrison added. And if we don’t want to treat ourselves as special, then we need to reassess whether we are truly dedicated to serving the needs of this community.

He noted that African-American households often don’t fit the mold of typical customers. But when advisors embrace and accept different ways of addressing their needs, they have a greater tangible value than working with repeat business, multiple referrals, and clients whose wealth was established before they met the advisor. Establish goodwill that leads to influence.

Ayo Mseka has over 30 years of reporting experience in the financial services industry. She was previously Editor-in-Chief of her Advisor Today magazine for her [email protected].

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