We often discuss the importance of planning for the future — making smart decisions, securing financial well-being, and protecting loved ones.
Life insurance is at the heart of this advice.
Yet, a significant gap exists in life insurance coverage within the Hispanic American community, and the reasons behind it are both complex and critical to understand.
According to LIMRA, just 42% of Hispanic Americans nationwide have life insurance. That’s the lowest ownership level for any race or ethnic group included in the analysis.
Providing education, affordable options, and fostering trust are all important steps toward ensuring Hispanic Americans have the means to secure their financial future and protect their families.
To dig deeper into this coverage gap, Bestow recently surveyed more than 230 self-identified Latinos and uncovered a striking statistic: 48% of those surveyed without life insurance expressed a willingness to purchase it “if or when my circumstances change.”
Let’s dig into what those circumstances may be, what unique barriers Hispanic Americans face, and how the life insurance industry can best meet their needs.
Going Beyond Family Support
The typical triggering circumstances for seeking life insurance coverage are marriage, starting a family, or making a significant purchase such as a home.
But at each of these milestones, cultural factors play a significant role.
Hispanic Americans often prioritize family, and the concept of protecting loved ones is deeply ingrained.
However, even with significant family support, the financial burden of loss is substantial.
Life insurance can ensure a stable future for the entire family.
33% of Hispanic Americans surveyed did not have any end-of-life plans in place.
Families without adequate life insurance coverage could face financial strain when facing the unexpected, including outstanding debts, mortgage payments, childcare expenses, and funeral costs.
This rings especially true for Bestow’s survey respondents, who had a median of just $5,000 in savings — which would not even cover the $8,000 cost of an average funeral in the United States.
These obstacles extend beyond life insurance to other financial worries: When asked to identify their top three financial concerns, those surveyed were most worried about saving enough for retirement, paying rent or mortgage, and building an emergency fund.
Especially as it relates to caring for children and passing on any financial legacy, end-of-life planning should include drafting and finalizing a will.
Meeting the Needs of Hispanic Americans
Hispanic Americans represent more than 20% of the U.S. population this year, and Nielsen has shown that those consumers have about $2 trillion in collective buying power.
To capture this market, the life insurance industry must proactively address the coverage gap within the Hispanic-American community.
Simply providing tailored educational resources is a step forward, but the industry must consider this demographic’s specific needs and circumstances when designing products.
One approach is to create simplified products with straightforward terms and transparent pricing.
This can demystify the world of life insurance, making it more approachable for those unfamiliar with the industry’s intricacies.
Even better would be to offer products in multiple languages.
Many individuals may feel uncomfortable navigating the complexities of insurance policies in a language that is not their first.
Collaboration with trusted community organizations and financial advisors who understand the unique needs of Hispanic Americans is another essential step, especially when services are offered online.
In Bestow’s recent study, 71% of Gen Z respondents purchased their life insurance online, as did just over half (54%) of millennials.
Further, 55% of all respondents indicated they primarily handle their finances online through apps or services.
Establishing partnerships with respected community members and institutions, especially those with a savvy online presence, will help build trust and provide valuable guidance.
We can bridge the coverage gap by recognizing the cultural, linguistic, and economic factors and adjusting our approach accordingly.
Life insurance is not a luxury but a vital tool for achieving peace of mind and safeguarding the well—being of those who matter most to us.
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