Hispanics have the lowest rates of life insurance ownership compared to whites and African Americans, claims a new study released today by the LIFE foundation and LIMRA.
The study points out a common insurance tale: While 70 percent of Hispanic consumers agree that they personally need life insurance, only 54 percent of them say they own it.
Still, the study shows the gap is much narrower among other demographic groups. To compare, 80 percent of African Americans and 67 percent of whites agree they need life insurance, while 76 percent of African Americans and 62 percent of whites own it.
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"Far too many Hispanics lack adequate life insurance coverage and are leaving their loved ones financially vulnerable by not insuring themselves," says Marvin Feldman, 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, 22 percent feel their coverage is inadequate. When asked why they do not own more, the top reasons cited are having other financial priorities (92 percent); life insurance being too expensive (83 percent); not being sure of how much or what kind to buy (74 percent) and not having been approached by anyone (58 percent).
A majority (69 percent) of Hispanics strongly agree the main reason to buy life insurance is for their family. The top reasons Hispanics give for owning life insurance are to cover burial and other final expenses (87 percent); help replace lost wages/income of a wage earner (75 percent); transfer wealth/leave an inheritance (75 percent) and pay off a mortgage (63 percent).
Researchers also found:
Hispanics want to understand what they are buying. When asked about important factors related to the purchase of life insurance, understanding what they are buying ranks highest among the group (27 percent), followed by getting the proper amount of coverage (22 percent), and getting coverage that is guaranteed for life (19 percent). Only 16 percent of Hispanics say that getting the best price is the most important factor.
Technology helps. 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 percent compared to 16 percent of whites and 15 percent of African Americans). When asked how they would use the Internet if they were about to purchase life insurance, 60 percent of Hispanics say they would research it online, but ultimately buy from an insurance professional. Roughly one in four (27 percent) would research and complete the process online and only 13 percent would not use the Internet at all.
Many "very concerned" about finances. When asked about common financial concerns, 41 percent of Hispanics say they are extremely or very concerned about having money for a comfortable retirement, followed next by paying for medical expenses (40 percent). Even though many Hispanics do not have any life insurance or are inadequately insured, only 31 percent say they are extremely or very concerned about dying prematurely and leaving family members in a difficult financial situation.
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