African Americans and Insurance Planning
Do Not Sell Them...Informed Them
In 1969, D. Parke Gibson published “The $30 Billion Negro,” an examination of the strength of the African-American consumer. In 1978, he published “$70 Billion in the Black: America's Black Consumers” In 1970, the Black population numbered 22.6 million, representing about 11 percent of the total U.S. population. In 2010 African Americans number 41.1 million, forming 13.5 percent of the total U.S. population. This population is expected to grow faster than the general population, and U.S. Census Bureau projections indicate that by 2050 there will be 66 million African Americans, representing 15 percent of the country’s population.
African Americans' historical and economical experiences in American and the United Kingdom have shaped the lens through which they see money matters. They have mainstreamed and their money personalities are very similar to their white counterparts.
- African-American clients may live in multi-generational households. Such households can occur for a variety of reasons.
- Middle class African American family members feel obligated to financially support their extended and even fictive kin financially.
- Financial Service Professionals who target African Americans need to be sensitive about living arrangements that may not be as common in the general population (e.g., multi-generational households that include extended family members beyond parents or grandparents).
Studies conducted by Life Insurance Marketing Research Association-LIMRA revealed African Americans prefer getting life insurance information from a financial advisor than from a life insurance agent/broker:
- Financial Services Professionals should offer financial planning on a basic level… and where needed on a more industrial strength level to help African American (Black) consumers manage their income and debt. This empowers them to build wealth and assets.
- Compared to the general population, African Americans…place greater emphasis on the goal of having adequate life insurance.
- Are more likely to consider life insurance more important today than in the past.
- Are twice as likely to consider purchasing life insurance for themselves or for someone else in the household.
- Have more positive attitudes toward life insurance companies and their field representatives.
- Desire retirement-related education as retiring in comfort is a high priority.
Financial Services Professionals can build trust by taking the time to do need analysis and dispel the perception that producers will pay more attention to their commissions (as opposed to the needs of their clients). Also Financial Services Professionals should be up front about their fees/charges for specific services; e.g., preparing a simple financial plan or commissions on specific products.
Financial Empowerment
Financial Services Professionals should understand how important empowerment is in this market. Don’t tell them what they need…since very few consumers let their advisors make all the decisions for them. Producers should provide information to their clients so that they can make their own educated decisions. This may also increase their level of trust in the Financial Services Professional.
"There is nothing more dangerous than to build a society with a large segment of people in that society who feel that they have no stake in it; who feel that that have nothing to lose. People, who have stake in their society, protect that society, but when they don't have it, they unconsciously want to destroy it." — Martin Luther King Jr.
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Jim Robinson posted on Sunday, March 06, 2011
Tags: Consumer Education, Financial Empowerment, African American, Black Americans
Posted in: Site News, Minorities
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