The LGBT community is an income force to be reckoned with. They are generally more educated and have a higher income than heterosexual couples, making them perfect candidates for the life insurance and financial advisor industry.
The Williams Institute, a think tank at UCLA that focuses on LGBT issues, dissected Census data to arrive at some startling conclusions. The study says that approximately 46 percent of people in same-sex relationships have college degrees, compared to under one-third of people in heterosexual relationships. And more education (usually) means more money. Median household income for same-sex couples with both partners in the labor force is $94,000, compared to $86,000 for heterosexual couples.
In the insurance industry, there is constant talk about tapping into new or emerging markets. Brazil, Russia, India and China (BRIC) often make up much of that discourse. There’s also South Africa, Turkey, Brazil and so on and so on. But while much of the focus is on the growth of these international markets – and the opportunity that this growth presents the insurance industry — little attention is given to an emerging market right here on U.S. soil: The affluent LGBT community.
According to a recent study by Spectrem Group, many affluent LGBT investors feel that their legal and advising needs are not well understood. The report, Advising the Affluent LGBT Investor, claims that overall investment knowledge is lower for wealthy LGBT households, particularly for ultra high net worth individuals.
This represents a producer’s favorite kind of emerging market. Cue the dollar signs.
Here, we have a demand, but little supply for few companies have fully embraced the opportunity that is the LGBT community.
Prudential is one firm that has taken note, however. They recently published a whitepaper on the topic, The LGBT Financial Experience, that states “despite some outreach by the financial services industry to the LGBT community, study participants rank the industry’s attention to their financial needs low.” They’ve even dedicated a page of their website to the challenges the LGBT community faces when it comes to financial planning and life insurance. New York Life has done something similar on their website.