WINDSOR, Conn., and ARLINGTON, Va., Sept. 20, 2013/PRNewswire-HISPANIC PR WIRE/ — The 2013 Insurance Barometer Study (IBS), now in its third year, reveals that Hispanics still have a low rate of life insurance ownership (59 percent) when compared to Whites (62 percent) and African Americans (66 percent.) These findings were released today as part of September’s Life Insurance Awareness month by the nonprofits LIFE Foundation and LIMRA. The 2013 Insurance Barometer Study is designed to increase understanding about consumer attitudes and behaviors regarding a host of insurance and financial planning matters.
Hispanics represent 16.3 percent of the total U.S. population and have a combined purchasing power of more than $1 trillion, yet this demographic feels underserved and uninformed on life insurance ownership and options. Many Hispanics (75 percent) still believe the cost of life insurance is too expensive and almost half (49 percent) remain uneducated about how much/what type of policy to buy.
In addition, Hispanics pointed to multiple financial priorities that take precedence over purchasing life insurance, such as paying for medical expenses (66 percent), reducing credit card debt (57 percent) and paying for a child’s schooling/college (39 percent.) Also, 28 percent noted that they have not purchased life insurance because they’ve yet to be approached by insurance agencies.
“Hispanics put a strong emphasis on the family unit. With the family in mind, many are still unaware of the benefits associated with life insurance ownership. Life insurance can build more security into life’s uncertainty; provide loved ones time to grieve when a death occurs; deliver funds to pay off debts and also have the ability to leave a legacy to surviving family members,” said Marvin H. Feldman, CLU, ChFC, RFC, president and CEO of the LIFE Foundation. “If Hispanics continue to delay the research and purchase of life insurance ownership, families are at risk for unanticipated financial challenges resulting from the death of a breadwinner. Nowadays, life insurance has never been easier or more affordable to purchase, yet many remain hesitant.”
Notably, the study indicated that almost half of Hispanics are very or extremely concerned about dying unexpectedly compared to less than a third of the general population. Among those Hispanics that are buying life insurance, the top reasons cited for buying it were to:
• Cover burial and other final expenses (89 percent)
• Help replace the lost income of a wage earner (69 percent)
• Transfer wealth/leave an inheritance (67 percent)
• Pay off a mortgage (57 percent)
• Cover home expenses such as child care, transportation, cooking and cleaning (54 percent)
“A study like this is important because it provides us with a foundation for understanding and addressing the Hispanic communities’ concern regarding affordability and the long-term benefits of life insurance,” added Mr. Feldman. “It’s important that agents and brokers tackle misconceptions about life insurance being too expensive and find the right approach on how to connect with Hispanics. With a preoccupying 46 percent expressing a high mistrust in insurance companies, our focus must be on building trust, education, and bridging cultural differences.”
Additional key findings from the research are as follows:
Purchasing Factors and Preference:
When Hispanics evaluated important factors related to the purchase of life insurance, many (51 percent) considered that getting the proper amount of coverage ranked highest, followed by securing coverage that is guaranteed for life (39 percent.) In addition, 36 percent agreed that obtaining the best price was an important factor.
When questioned about common financial concerns, 66 percent of Hispanics said they are extremely or very concerned about having money for a comfortable retirement, followed next by paying for long-term care services (59 percent.) Even though many Hispanics do not have any life insurance or are inadequately insured, 64 percent are extremely or very concerned about supporting themselves if they become disabled and are unable to work. To date, only 25 percent own disability insurance. To address this matter, life insurance providers must educate Hispanics about the accessible cost and various options of life insurance policies available.
When asked about using the internet for help in making life insurance purchases, 25 percent of Hispanics indicated they sought information online. Currently, 22 percent of Hispanics access their investments or retirement accounts using their mobile phones. An interesting finding of the study also revealed that 14 percent of Hispanics (compared to only 7 percent of Whites and 8 percent of African Americans) have acquired life insurance ownership online. This finding points to Hispanics’ preference for conducting certain transactions online, something that life insurance providers must take into account as they reach out to this important demographic.
The nationwide Insurance Barometer Study was fielded in January 2013 by Harris Interactive using an online panel, which surveyed U.S. adults in both English and Spanish. The 2,000 respondents were between ages 18 and 75 and shared or were the sole decision maker for financial matters in the household. The data was weighted by age, gender, education, race, region and income to be representative of the general population. The margin of error in this study is +/- 2 percentage points.
The Life and Health Insurance Foundation for Education (LIFE) inspires the public to take personal financial responsibility through the ownership of life insurance and related products. LIFE is the voice of choice for the industry providing the highest quality independent and objective information about life insurance and related products. To learn more about LIFE, go to http://www.lifehappens.org.
LIMRA is a worldwide research, consulting and professional development organization that helps more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness. Visit LIMRA at http://www.limra.com.
SOURCE The Life and Health Insurance Foundation for Education (LIFE)