Insurance is designed to help and protect people, yet some of the most vulnerable people are being underserved or excluded from the insurance market.
For example, Black Americans’ life insurance ownership rate has historically been above the rate for the general population. Yet 48% of Black Americans say they need (or need more) life insurance coverage, indicating a large coverage gap in the Black American community. Only 45% of Hispanic Americans have life insurance, lower than any other racial or ethnic group. And just 42% of LGBTQ+ people own life insurance.
Insurance gaps are important to consider as underserved communities often feel widespread financial insecurity and pressures. Sixty-four percent of Black adults rate their personal financial situation negatively, or only in fair or poor shape, according to Pew Research. And only 45% of Black adults say they could cover their expenses for three months with personal savings if they faced the sudden loss of their main source of income. Meanwhile, 43% of Hispanic immigrants say their households have difficulty affording basic needs, and 61% of LGBTQ+ people live paycheck to paycheck.
These numbers highlight the need for inclusive insurance aimed at excluded or underserved markets. Adequate, financially inclusive insurance products can help support vulnerable families and create a path toward financial security for those who have been marginalized.
In honor of Black Business Month, let’s explore four ways we can make insurance more inclusive and cater to marginalized populations.
1. Raise Awareness That Insurance is for Everyone
Forty-one percent of Black Americans don’t think they would qualify for life insurance coverage.
One explanation is that many people in underserved communities believe that they don’t resemble the typical insurance customer and therefore assume they don’t qualify.
By raising awareness that insurance is for everyone—and there’s no typical insurance customer profile—we can help people get the coverage they need.
2. Clear Up Misconceptions That Insurance is Too Expensive
Many people believe insurance costs more than it actually does. For example, LIMRA shares that the top reason Black Americans give for not purchasing life insurance is that it’s too expensive—but 75% of Black Americans overestimated the cost of coverage threefold.
The average cost of life insurance is just $26 a month. By educating people on the actual costs of insurance, we can help more people realize that they can afford the products that help protect financial security.
3. Provide an Accessible Introduction to Insurance
Many uninsured people say they don’t know where to start in the insurance process. They don’t know who to talk to, what companies to trust, what products they need, or how to apply for coverage.
LIMRA shares that 54% of U.S. workers say they have life insurance through their workplace, and 67% rely on workplace life insurance to meet their insurance needs. This highlights the responsibility business owners have to educate their employees on the importance of financial protection products.
Social media offers another accessible point of connection with underserved communities. By connecting with uninsured people and answering important questions, we can help them feel more comfortable navigating insurance.
4. Understand the Unique Insurance Needs of Marginalized Communities
Insurance needs vary significantly across life stage, race, ethnicity, gender identity and socioeconomic position, and uninsured people will continue to be excluded from the insurance market if they’re only presented products that are out of their budget or scope of needs. Affordable products or products with shorter-term coverage can help more underserved people get the financial protection they need.
Want more? Check out our blog, Who should buy supplemental health insurance?
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Bankers Life is here to help customers with their financial and insurance needs so please visit us at BankersLife.com to learn more.
