It is no secret that there is racial wealth disparity in America, with a significant gap in income and net worth across races. For instance, data from the Pew Research Center shows that the median income of African-American households is only 61% of that of white households. Moreover, on average, White families are 10x wealthier compared to Black families. In terms of mortality rates, African Americans are more likely to die while still working compared to Caucasians. When a breadwinner dies, the loss is often compounded by financial struggles, including debt because of costly medical care and loss of income. This is where life insurance comes in handy.
The Importance of Life Insurance
Having a life insurance plan is one of the most effective and affordable ways of providing a financial cushion to your dependents, especially if you die suddenly. Life insurance is even more important for families that don’t have substantial financial resources. Unfortunately, it’s often the lower-income families that don’t carry insurance and research shows that there is a life insurance race gap.
With a life insurance plan, you pay monthly premiums, and your dependents get a cash payout, which can amount to hundreds of thousands or even more if you die with your policy still active. The payout from life insurance comes with no restrictions.
Life Insurance Race Gap
There isn’t much disparity in the percentage of adults who own some type of life insurance. It’s nearly the same in White, Hispanic, and African American demographics. However, LIMRA, an industry group, found that more African American individuals feel they have don’t have adequate life insurance coverage.
The aforementioned LIMRA survey exposes gaps in life insurance. According to the research, one-third of African Americans with life insurance said that in case the primary breadwinner dies, they will have financial difficulties almost immediately. African American participants also said that what’s preventing them from getting insurance plans is that they’re finding it hard to decide on what to buy and they have other financial obligations.
African American adults are also much more concerned in other areas such as:
- Passing on generational wealth
- Paying monthly bills
- Saving money for emergencies
- Burdening their families in case they die prematurely
Life Insurance Industry Gap
In 1964, the Civil Rights Act ended prejudiced conduct in the insurance industry like using race as a factor when determining premiums, which led to Black customers paying higher rates for less value compared to White customers. In 2020, insurance industry players acknowledged that some disparities exist and pledged to find solutions, according to a recent article published by Forbes.
Ending Disparities and Meeting Everyone’s Unique Needs
To end racial disparities in life insurance, individuals from all backgrounds should have access to life insurance options and should find the right help in choosing the right policy for their families. Life insurance is much more affordable than you think and the process of acquiring a policy can be simple and quick.
Looking for the right life insurance? The team at J. Archer Insurance Group are ready to help. Serving Houston, Texas and beyond, contact us today. We can help you find suitable coverage that meets your high-net-worth needs and lifestyle. As well as insurance, we offer risk management and consulting services so that you can be sure you are in good hands. We are excited to help you secure your financial future today.