Protect Your Assets: Here’s What Black Americans Should Insure

A great need in Black communities: the importance of having life insurance.

A simple scroll across Facebook, and we’re bound to see one each month: a GoFundMe funeral campaign. These grassroots fundraisers provide emergent relief for families to bury loved ones, but the frequency of such campaigns during a time of immense grief speaks to a greater need in Black communities: the importance of having life insurance.

“Life insurance is one of the things where we are chronically underinsured. We’re not having the conversations about what mom, dad, grandma, grandpa have in terms of their policies, but we find out too late that there’s not money available there,” said Omari Aarons-Martin, executive director and chief operating officer for National African American Insurance Association (NAAIA), the oldest and largest organization supporting Black professionals across the insurance industry.

“There are situations like getting life insurance policies as soon as you have a child and getting them covered right away.”

So, when considering coverage, what should Black Americans insure and why?

“Black Americans should utilize insurance to build a robust financial safety net, protecting themselves and their families from unexpected financial hardships and contributing to long-term economic stability and empowerment,” stated Ryan L. Smith, executive vice president of Atlanta Life Insurance Company, the nation’s only remaining Black-owned and Black-founded insurance company.

Why is Insurance Important?

When it comes to insurance, the concept of coverage is embraced by many, but it causes concern or raises questions for others, particularly in the Black American community.

“There’s a serious trust gap that exists between Black Americans and—not just the insurance industry—but the financial services industry at large,” said Aarons-Martin.

“And so, with most consumers, they don’t really separate out ‘insurance’ from ‘the bank’ in terms of thinking about their overall financial portfolio, so we know there’s a lack of access and a lack of education; both in terms of the physical experience of being able to walk in and talk to someone in an insurance office in your community.”

LIMRA, a life insurance industry research organization, found in its 2024 Insurance Barometer Study that the greatest need for life insurance is among households earning less than $50,000 per year, Hispanic Americans, Black Americans, millennials, Gen Z, and women. According to LIMRA’s research, 31% of Black Americans believe that life insurance is only for final expenses, and 66% say that is the primary reason they own life insurance. Only 48% of the general population say the same.

Nationwide’s Life Insurance Business President Holly Snyder said, “The perception of life insurance could result in Black Americans not purchasing enough coverage to provide income replacement or enable wealth transfer.”

Nationwide is one of the world’s largest insurance and financial services companies.

“If you pass away, no one will ever replace your energy, your spirit, the joy you bring to your loved ones. However, your income is replaceable if proper planning is in place,” Snyder told BLACK ENTERPRISE.

“If you make $50,000 a year, for example, you will provide $1.5 million of income to your household over the course of a 30-year career. That amount of money provides housing, clothing, food, and education to your loved ones, and not having income places a huge financial strain on them if the worst-case scenario happens. And term life is affordable, especially for people in their 20s and 30s.”

What We Should Insure

We often think of home, auto, renter’s, or even pet insurance policies, but a robust insurance coverage plan, according to Smith at Atlanta Life, should include:

Life Insurance

“Life insurance can also be utilized as a wealth-building and transfer tool,” Smith said.

“Like any wealth-building tool, getting started as early as possible is best. Just as parents can pass wealth to their children through real estate, so can they do with life insurance, often at a fraction of the monthly cost of homeownership.”

This coverage typically comes in the form of employer-paid and employee-paid/voluntary benefits offered as group life insurance. Supplemental Life Insurance can provide additional coverage beyond a basic life insurance policy, offering more comprehensive financial protection.

“When talking about life events, we commonly see the life insurance purchase around the time people are getting married, having kids, or buying a home,” said Snyder with Nationwide.

“We also see a much-needed discussion for long-term care insurance called the 40/70 talk –- which encourages you to have the long-term care discussion either when you are 40 or when your parent reaches the age of 70.”

Healthcare
- “Medical expenses are a leading cause of bankruptcy in the U.S.,” Smith said. “Health insurance is meant to provide coverage for medical care in the form of preventative care and diagnosis and cover the cost of unexpected expenses related to injury and acute and chronic illnesses.”
- Supplemental health coverages are designed to help fill gaps in coverage, and long-term care insurance covers expenses such as those for nursing homes or in-home care, which are not typically covered by health insurance or Medicare.
Annuities and Retirement
- “Annuities can be a valuable part of a comprehensive retirement strategy, providing financial security, income stability, and other benefits tailored to individual needs and goals,” Smith said.
For Business Owners
- “Protecting the assets and income potential of the business is just as important as protecting the assets and income potential for an individual to preserve and transfer generational wealth,” Smith said. He added that most Black-owned businesses are categorized as small- to medium-sized enterprises and often have less than 100 employees, requiring a foundational basket of insurance policies: General Liability, Professional Liability, Worker’s Compensation, and Business Income Insurance. Aarons-Martin added that cyber insurance may be needed to protect data such as social security numbers or credit card information.
- “Additionally, as Black business owners look to grow their enterprises, the ability to hire talent, retain talent, and build a high-performing team is heavily influenced by incentives and employee benefits,” Smith said, noting a business should consider offering employees Health, Life, Accidental Death & Dismemberment, and Disability insurances; Long Term Care; Absence & Leave; Dental & Vision; and Supplemental Health Insurance.

How to Insure

In securing coverage, Aarons-Martin said his organization, NAAIA, encourages Black Americans to work with a Black insurance agent. Independent agents can write and look for policies and get you the best rates from a variety of different companies, while captive agents work for well-known national or global companies and only sell products through that particular organization. Folks can contact NAAIA to link with one of their 24 chapters to help find an agent, or the Association of African American Financial Advisors provides a list of financial advisors.

You can also start in your circle.

“There’s someone you know who works in the insurance industry, so start with them and ask them for recommendations based on what you need,” Aarons-Martin said of industry members in churches, civic and Divine 9 organizations, and friend groups.

To solve a longer-term need, Snyder said Nationwide is one of the founding members of FARE -– the Financial Alliance for Racial Equity–-created to solve the discrepancy in financial professionals in the Black community.

Nationwide has several educational campaigns in the market “to help Black Americans make informed coverage decisions. For those without a financial professional (often younger), we offer an online quote and application for term life insurance that is easy, quick, and affordable,” said Snyder. Nationwide also offers a library of resources to explain various insurance topics in English, Spanish, and Chinese, and they have a bilingual phone representative who offers free consultations and the ability to purchase policies in Spanish as well.

Whether you’re seeking coverage for the first time or have had coverage for many years, experts advise routinely checking on the status of your policies.

“The same as when we go to the doctor and have a checkup, you also should get an insurance checkup with your insurance agent,” said Aarons-Martin, noting many policies renew annually or bi-annually. “It’s never too early, and it’s never too late to think about your coverage or make sure you get covered.”

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