"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 at LIMRA Markets Research, in a statement. "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."
The report compares the financial goals of African Americans to the general population and found that the top three goals-having enough money for a comfortable retirement; having adequate health insurance; and paying off debts such as student loans, credit card debt and mortgage-are the same. However, African Americans place more importance on having life insurance and having a plan to replace income if unable to work than the general population.
LIMRA's research also found that the financial goals vary depending on age as younger African Americans adults are more concerned with paying off debt while older African American adults are focused on having adequate savings for retirement, which is consistent with the general population. The study also uncovered that about one-third of African Americans are very optimistic that their income will improve within the next three years, which is higher than the general population (23%).
The study found that a third of African Americans indicate that their risk tolerance levels have decreased over the past year. This implies that African Americans now may be more conservative with their investments. As a result, their savings may not grow fast enough for them to achieve their various financial goals.
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%) like an annuity than the general population (56%).
"There is a great need for retirement-related education," Ahmed said. "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 surveyed household financial decision-makers between ages 25 and 74, with household incomes of at least $35,000 in the fall of 2009. Data were collected from 2,220 respondents from the general population, and 681 African Americans. The data for both African Americans and the general population were weighted to represent their respective populations.
Read a LIMRA study on life insurance sales from the archives of InvestmentAdvisor.com.