While 70% of Hispanic consumers agree they personally need life insurance, only 54% of Hispanics say they own it. The gap is much narrower among other demographic groups. In comparison, 80% of African Americans and 67% of Whites agree they need life insurance, while 76% of African Americans and 62% of Whites own it.
These findings were released by the non-profit LIFE Foundation and LIMRA as part of the organizations' "The 2011 Insurance Barometer Study," a new, annual survey designed to increase understanding about consumer attitudes and behaviors regarding a host of insurance and financial planning matters.
"Far too many Hispanics lack adequate life insurance coverage and are leaving their loved ones financially vulnerable by not insuring themselves," said Marvin H. Feldman, CLU, ChFC, RFC, President and CEO of the LIFE Foundation. "Life insurance has never been as easy or inexpensive to buy, yet millions continue to put off getting coverage that they, by their own admission, say they need."
Of the Hispanics who have life insurance coverage more than one in five (22%) feel their coverage is inadequate. When asked why they do not own more, the top reasons Hispanics cite are having other financial priorities (92%), life insurance being too expensive (83%), not being sure of how much or what kind to buy (74%) and not having been approached by anyone (58%).
A majority (69%) of Hispanics strongly agree the main reason to buy life insurance is because of love for their family. The top reasons Hispanics give for owning life insurance are to cover burial and other final expenses (87%), help replace lost wages/income of a wage earner (75%), transfer wealth/leave an inheritance (75%) and pay off a mortgage (63%).
When asked about important factors related to the purchase of life insurance, understanding what they are buying ranks highest among Hispanics (27%), followed by getting the proper amount of coverage (22%), and getting coverage that is guaranteed for life (19%). Only 16% of Hispanics say that getting the best price is the most important factor.
The research also found that across all demographic groups, people are increasingly turning to the Internet for help in making life insurance purchases. Although two thirds of all consumers still prefer to buy life insurance face-to-face from an insurance or financial professional, Hispanics, more than any other demographic group, prefer to purchase a policy direct from a company via the Internet (23% compared to 16% of Whites and 15% of African Americans). When asked how they would use the Internet if they were about to purchase life insurance, 60% of Hispanics say they would research it online, but ultimately buy from an insurance professional. Roughly one in four (27%) would research and complete the process online and only 13% would not use the Internet at all.
When asked about common financial concerns, 41% of Hispanics say they are extremely or very concerned about having money for a comfortable retirement, followed next by paying for medical expenses (40%). Even though many Hispanics do not have any life insurance or are inadequately insured, only 31% say they are extremely or very concerned about dying prematurely and leaving family members in a difficult financial situation.
The online survey was fielded from Feb. 3 – 8, 2011 by Harris Interactive. The 2,051 respondents were between ages 18 and 75 and shared or were the decision maker for financial matters in the household. The margin of error in this study is +/- 2 percentage points or less.
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