Members of minority groups and lower-income households that want and need life insurance the most are being slighted in the marketplace, according to a survey released Monday by a Washington-based market research and consulting firm - polling company inc.
It said 92% of African-Americans and 82% of Hispanics said they believe life insurance is essential, compared with 72% of white people. However, only 39% of African-Americans reportedly own a life insurance policy, and 40% of Hispanics do, compared with the national average of 47%.
The study was released as the National Association of Insurance Commissioners discuss the possibility of creating a special license that would let agents sell only term life insurance as a way to reach this market. (Term life has been the most successful life insurance program in the bank channel because it is relatively simple to explain and apply for.)
The survey echoed earlier ones. Limra International, an insurance research group, released a study in April that said 77% of respondents had no personal life insurance agent. A study by the insurance management association, GAMA International, released in March, concluded that the need in lower- and middle-income markets greatly exceeded the industry's capacity to serve it.
polling company inc. said its survey showed that the lower one's income, the higher the priority given to life insurance. About 79% of households earning $30,000 to $50,000 per year - which generally have not accumulated assets sufficient to sustain the family after the loss of a breadwinner - said that life insurance is among the most important types of coverage to own. But only 35% in that income bracket said they have life insurance.
Hispanics were more likely than any other group never to have met with a life insurance agent. In fact, half said they had no experience with an agent. Among black people, 24% said they had no experience with an agent and 32% said they were unfamiliar with life insurance products.
