By Michelle Greene Rhodes
- Life insurance and annuity benefits reach record highs with nearly $200B in financial security provided to families and retirees
- 56% of Black Americans have life insurance and are more likely than other ethnic groups to purchase it
As people search for certainty in these hard economic times, life insurance has been a huge relief. In 2021, life insurance and annuity benefits reach record highs with nearly $200 billion of financial security provided to families and retirees. Since 10% of Black families receive a wealth transfer including things like life insurance payouts, versus 46% of white families, this financial product could help to close the wealth transfer gap.
Why This Matters: Currently, 56% of Black Americans have life insurance, according to that study by LIMRA and Life Happens. However, their benefits aren’t enough to replace income or provide cash value options during their lifetime.
Today, African Americans are more likely than their white counterparts to have life insurance policies, and despite earning the same incomes, white families tend to buy more insurance than Black ones. The fact that we don’t buy enough insurance and many of us do too little too late means that our coverage is often insufficient. So what can be done?
The first step is to obtain or create an asset. For example, start a business, buy real estate, invest in stocks and bonds, purchase artwork, or any other valuable possession that can be passed down from generation to generation. Next up, protection for your assets, by securing insurance coverage for both life and property losses.
Finally, it’s time to pass down those assets in a safe and tax-efficient manner. Life insurance has traditionally been one of the key methods for enhancing prosperity and financial security across generations.
Situational Awareness: When we fail to make preparations early on in life, the world around us will stay as it is even after we are gone. We no longer have to wait around and let the wealth transfer gap affect our Black community. By purchasing enough life insurance early on in life, we can give our families income, provide for college tuition, and start building generational wealth.
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