Hispanic Americans report the greatest need for life insurance

Only 43% of Hispanics report having life insurance coverage, the lowest ownership among any racial or ethnic group over the last decade, according to the 2024 Insurance Barometer Study by LIMRA and Life Happens.

In spite of this coverage gap, most Hispanics (53%) say that they need, or they need more life insurance protection, which is 11 points higher than the general population. Without proper life insurance coverage, many of these individuals would experience financial hardship if a loved one were to pass away unexpectedly. In fact, 46% of Hispanic families said that they would face financial hardship within six months should the primary wage earner were to die unexpectedly.

Why work with this market?

According to LIMRA, effectively engaging this market represents a big opportunity for the industry. Over the past decade, the Hispanic American market has grown by 23% to 62 million, representing nearly 1 in 5 Americans. This market is projected to continue to grow substantially, reaching almost 82 million by 2040.

In addition to their growing numbers, Hispanic Americans have made substantial gains in wealth. From 2013 to 2022, median inflation-adjusted wealth of Hispanic families in the U.S. has more than tripled, from $18,000 to $62,000, with younger Hispanic generations reporting the biggest rise. Yet, life insurance ownership has not kept up.

What’s the problem?

So, what’s stopping Hispanic Americans from acquiring the life insurance they need for themselves and their families? Cost (38%) and competing financial priorities (38%) are the leading reasons, which may be due to a common misconception that life insurance is expensive, explained Brian Steiner, executive director at Life Happens. “However, life insurance is actually quite affordable and is more affordable the earlier you purchase it,” said Steiner. “For example, a healthy, 30-year-old can get a 20-year term life insurance policy with $250,000 of coverage for around just $16 a month.”

Having healthy conversations about finances and end-of-life planning can make the topics less intimidating, leading to a better understanding about life insurance and its benefits, Steiner said. But those conversations aren’t ones that many Hispanic Americans are having; only a quarter of Hispanic Americans are comfortable when talking about end-of-life planning.

“It’s important to have those healthy conversations about finances and life insurance to break down myths about life insurance, such as the cost of coverage, which is why we at Life Happens created educational material about life insurance in Spanish and a free Life Insurance Needs Calculator in Spanish to help Hispanic Americans get a better understanding of their coverage needs,” added Steiner.

Getting Hispanics to buy more insurance

And what can insurance agents and financial advisors do to get their Hispanic clients to buy more life insurance? “Accessibility is everything,” added Steiner. “The industry needs to be driving easy-to-understand financial conversations to the platforms where Hispanic Americans are actively seeking information – and one thing that stands out is how much this community turns to social media for financial information.”

Hispanic Americans are using platforms like Instagram and TikTok for their financial information (66% compared to 53% of the general population), according to the 2022 Insurance Barometer Study, so, meeting them on Instagram and TikTok with easy-to-understand content is key, added Steiner.

Accessibility also applies to language; language barriers can be a real challenge, so making resources available in Spanish is a big step towards a better understanding of what life insurance is. “Plus,” Steiner added, “it will show the Hispanic American community that language will not be an impediment to putting life insurance protection in place.”

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Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at [email protected].