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September 13, 2013 at 01:00 PM
Numbering 43.9 million, African Americans currently make up 13 percent of the population in the U.S; by 2060, according to the U.S. Census Bureau, that percentage is expected to catapult to 77.4 million, or 18 percent of the U.S. population. It is an increasingly affluent group: In 2011, 3.1 million African Americans were enrolled in college, a 74 percent increase since 2001.
As a target market, this demographic is looking to meet a cohesive set of goals, with one product at the top of their wish list: life insurance. Here’s how you can reach them.
1. Covering funeral expenses is their No. 1 concern.
In National Underwriter’s recent Multicultural Markets study, we asked producers who serve the African-American market to name the concerns and goals their clients brought to them most often. There was a clear winner: Fifty-seven percent said covering funeral expenses was the No. 1 thing their clients came to them to accomplish. This was in sharp contrast to the other groups studied, who were less concerned about this issue. The runner-up? Providing security for their families in the event of death of the primary breadwinner (50 percent).
2. Succession planning is not a concern (though it probably should be).
On that same list of client concerns, succession planning for small business owners was named by a lowly four percent of producers as a concern their clients regularly broach. This, despite the fact that African Americans own 7 percent of U.S businesses, according to the 2007 U.S. Census, making them the third largest group of minority business owners, behind women (29 percent) and Hispanics (8 percent). James R. Veal, president of JRV Financial, notes that the lack of interest in succession planning may because of a low financial literacy, which is prevalent across the general population as well, but can be more pronounced in this market. He says: “Seldom has anyone ever talked to African American prospects or taken them by the hand and taught them basic financial strategies. We have always been aware of financial deficiencies in the African American communities due to the lack of financial professionals, educational opportunities, and neglect.” To help solve this problem, Veal champions education on topics that are relevant for individuals and small business owners alike, including tax planning and building wealth.
