For advisors with a robust insurance planning business, listen up. African Americans place greater emphasis on the goal of having adequate life insurance. They are also twice as likely to consider purchasing life insurance for themselves or for someone else in the household compared to the total U.S. population, according to a new LIMRA study.
“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.