Black Americans are buying more life insurance. Here's why.

Even though he was devastated, Oaks said he still felt fortunate that he was able to give his son a proper burial because he had life insurance.

According to a study of 3,000 people released this month by LIMRA, a research organization for insurance and financial services companies, Black people are incrementally getting the message that Oaks learned long ago.

Its 2021 Barometer Study says that 56 percent of Black Americans have now purchased life insurance policies in the last year, which is the highest rate among all racial groups. .

This gain shows that Black people have responded to the harsh reality of mortality amid the devastating impact of the coronavirus on their communities; Black Americans have suffered the highest death rate per 100,000 people than any other group, according to the National Center for Health Statistics. .

“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.”.

As reflected in the study, McGowan said he has seen an influx of policies acquired by clients since the pandemic began?

According to the survey, Black Americans largely had not purchased coverage pre-pandemic because they were more likely than the general population to overestimate the cost of life insurance (75 percent versus 50 percent).

It concluded that Black people had a higher level of financial concern than the overall population average, adding that Covid exacerbated those concerns.

An average Black family’s net worth is less than 15 percent of that of the average white family as of 2020, according to the Federal Reserve, creating a stark racial wealth gap that Salka said could be impacted if Black people purchased more life insurance.

According to the study, Black Americans are more likely than other racial groups to view life insurance only for burial and final expenses.

This perception of life insurance could result in Black Americans not purchasing enough coverage to provide income replacement or enable wealth transfer, two key ways life insurance can benefit loved ones after a wage earner dies.

Stephanie Harris of Detroit calls herself “The Insurance Lady.” She sells life insurance as an independent contractor with American Income Life, and has warned potential Black clients to seek plans that would benefit them instead of selecting the least expensive option. .

Life insurance can be the financial security for our future and our children’s children, because the quickest form of transferring wealth is life insurance.”

“I may not be able to sell the big executive policies, universal life policies, but I can sell a burial policy with anywhere from $30 to $50 a month

He said he has seen people without life insurance try to raise money for burials and costs “through a fish fry, washing cars, raffle tickets.” He said, “You’ll never raise enough money

During the pandemic, McGowan created a social media group of 175 Black agents of State Farm across the country to discuss concerns and spread life insurance education for Black communities.