A study of 3,000 people released this month by LIMRA, a research organization for insurance and financial services companies, is revealing that Black people are increasing the amount of life insurance they’re buying.
The 2021 Barometer study says 56 percent of Black Americans have purchased life insurance policies in the last year – the highest among all racial groups.
The increase is a result of the disproportionate effect the coronavirus pandemic has had on the African American community in the United States. Black Americans have suffered the highest death rate per 100,000 people than any other group, the National Center for Health Statistics finds.
The pandemic “brought the idea of mortality to the forefront of people’s minds,” said Alison Salka, a senior vice president and director at LIMRA, according to NBC News. “So generally, we found that because of the pandemic, almost a third of customers said they were more likely to buy life insurance because of it, but that number goes up for different demographic groups, like Black Americans.”
Erwin McGowan, a 59-year-old State Farm operator and agent told the news outlet that he’s seen an influx of policies acquired by clients since the start of the pandemic. He says life insurance “represents a level of security that, ‘I can at least bury my loved one with dignity and without worry.’ That’s the low end of what life insurance can do. There is so much more to help families. But the biggest problem in our communities is the lack of education around life insurance, especially around its cost.”
The survey also reveals Black Americans largely had not purchased life insurance coverage pre-pandemic because they were more likely than the general population to overestimate the cost of life insurance (75 percent versus 50 percent).
Additionally, the wealth gap in America is a major reason life insurance was purchased at a lower rate compared to other racial groups. According to the Federal Reserve, as of 2020, an average Black family’s net worth is less than 15 percent of that of the average white family. The study also reveals that Black Americans are more likely than other racial groups to view life insurance only for burial and final expenses.