New results from New York Life's Life Insurance Gap study show that African Americans report more financial stress than the overall population, but are also more proactive about addressing it.
According to the study, 50 percent of African Americans say that planning for the future causes a high degree of stress, versus 44 percent of all adults. Three in 10 (31 percent) African Americans report not feeling financially secure, versus two in 10 (21 percent) overall. Despite reporting higher levels of financial stress, African Americans are more likely to seek out expert guidance, with nearly 80 percent saying they would consider seeking professional help from a financial advisor. Of those African Americans who are already working with an advisor, 65 percent say they meet with their advisor more than once per year, versus 49 percent of all adults.
Among the key factors driving increased financial stress, African Americans point to:
· Having adequate savings: 50 percent of African Americans say having enough saved is a stressor, versus 42 percent of all adults.
· Debt: 42 percent of African Americans are concerned about debt levels versus 30 percent of all adults.
· Maintaining their current level of income: 46 percent of African Americans report being concerned about maintaining their current income versus 34 percent of all adults.
"Although African Americans report more financial stress than the general population, they are consistently working to mitigate it by seeking guidance from trusted advisors to ensure their families’ futures are protected and their broader retirement and wealth planning needs are met," said Eric Jackson, corporate vice president and market manager, New York Life.
Embracing the many benefits of life insurance
African Americans are also more likely to view life insurance as a key component of their financial plan and as a vehicle for wealth transference. In fact, nearly 80 percent of African Americans rank having life insurance as a priority financial goal, versus just 63 percent of all adults, and 93 percent say it helps future generations succeed.
“In thinking about their financial futures, African Americans recognize the opportunity to use life insurance to protect their families and at the same time, create wealth for the Black community at large”—Eric Jackson, corporate vice president and market manager, New York Life.
The top reasons African Americans cite for purchasing life insurance include:
· 83 percent view it as a key way to take care of their families;
· 68 percent want their life insurance proceeds to pay for a child’s college education;
· 37 percent intend to leave a legacy; and
· 28 percent use life insurance to transfer wealth.
"In thinking about their financial futures, African Americans recognize the opportunity to use life insurance to protect their families and at the same time, create wealth for the Black community at large," said Jackson. "Our agents are consistently seeing attitudes about life insurance shift from primarily using proceeds to cover burial expenses to leveraging policies to grow small businesses, fund a college education and leave a legacy for future generations.
As more people recognize the value of this important tool and the peace of mind comes with seeking professional guidance, we expect interest in both the product and the agent profession to grow. There’s no greater satisfaction for our agents than helping people in their communities attain financial clarity as the result of a customized strategy," added Jackson
The 2018 study was conducted by Ipsos from June 12-26, 2018 on behalf of New York Life. For the survey, a sample of 1,738 adults between ages 25-70 from the U.S. was interviewed online, in English. This sample includes 1,176 adults who have life insurance and another 562 adults who have no life insurance coverage. To qualify for the survey, respondents had to be married and/or have financial dependents and have an annual household income of at least $50,000.
The survey used generational information as defined by the Pew Research Center.
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