The impact of COVID-19 continues to weigh on Black Americans. According to LIMRA’s latest Consumer Sentiment Study, while Americans’ overall concern about COVID has dropped by half to 25% compared to a year ago, 4 in 10 Black Americans continue to express heightened concern about COVID-19 and 41% report high levels of financial stress in early 2023, compared with just 32% of the general population.
“Throughout the pandemic, Black Americans experienced higher infection rates and mortality due to COVID-19, which negatively impacted their financial well-being,” noted Alison Salka, senior vice president and head of LIMRA research. “Beyond the health concerns, Black Americans, in general, have suffered greater financial challenges since the pandemic began. In 2022, the unemployment rate for Black Americans was nearly twice that of the general population (6.1% versus 3.6%) and their household income continues to lag behind the general population.”
LIMRA’s research shows a majority of Black Americans (53%) say a top financial goal is to save more in 2023. Yet the reasons they plan to save more are significantly different than for the general population. Of consumers hoping to save more this year, two-thirds of Black Americans who say they plan to increase their savings, do so to be able to pay for emergencies and unexpected expenses while less than half of the general population cite the same (48%). In general, 44% of Americans with a goal to increase savings plan to use that money to supplement their retirement assets while fewer than 3 in 10 Black Americans say the same.
“Consistently, our studies have shown that more Black Americans are worried about day-to-day financial challenges, including job security, paying monthly bills, and supporting themselves and their loved ones should they become ill or disabled,” Salka says. “These concerns may prevent them from focusing on their longer-term financial security.”
One of the ways Black Americans can improve their sense of financial security is by owning life insurance. According to the 2022 Insurance Barometer Study, 68% of Black Americans who own life insurance feel financially secure, compared with just 47% of uninsured Black Americans.
Black Americans recognize the important role life insurance plays in protecting their loved ones. Historically, Black Americans’ life insurance ownership rate has been above the rate for the general population. In 2022, 55% of Black Americans reported owning life insurance, which is higher than the national average (50%). Yet 48% of Black Americans — representing 21 million adults — say they need (or need more) life insurance coverage, which indicates a substantial coverage gap in the Black American community.
Despite the fact that Black Americans reported higher levels of financial concerns, LIMRA research also showed a higher intent to purchase life insurance. Sixty percent of uninsured Black Americans intended to purchase life insurance, compared with just 37% of the general population.
Moving these consumers from intention to action may require helping them understand how affordable and accessible life insurance is. The top reason Black Americans give for not purchasing coverage is that it is too expensive. Yet 75% of Black Americans overestimate the cost of life insurance threefold. In addition, 6 in 10 say they don’t know what to buy or how much they need and 41% don’t think they would qualify for coverage.
As the nation celebrates Black History Month, our industry should work together to create the educational tools and resources to help Black Americans get the coverage they need to protect their loved ones and attain greater financial security.