Opportunity in an underserved market: Hispanic Heritage Month survey results

Hispanic Americans prefer buying online, yet are underserved by carriers.

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October 2, 2023

Written by

Chelsie Timmins

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At Bestow, we believe expanding access to life insurance means meeting customers where they are. Ahead of Hispanic Heritage Month, we commissioned a survey of self-identified Latinos, and wanted to share some insights into their financial motivations and barriers.

Behind the numbers: Hispanic Americans prefer buying online, yet are underserved

One of our motivations from the early days of Bestow was to expand access to everyone, and we’ve found, over the years, the barriers to purchasing life insurance often differ for distinct populations. As we approached Hispanic Heritage Month, we wanted to learn more about how we can better meet the needs of this growing yet often underserved group. Let’s dive in.

Coverage gap and market opportunity

Latinos represent almost 20% of the U.S. population, but their life insurance coverage gap outpaces all other groups, according to LIMRA. Despite shouldering the responsibilities of financial dependents, 51% of Latinos we surveyed said they did not have any life insurance. Meanwhile, respondents' median liquid cash savings was around just $5,000, which isn’t enough to cover the cost of the average funeral in the U.S., not to mention other expenses.

When a family member dies, survivors are often hit with numerous unexpected costs. Without life insurance or significant savings, an already stressful time can be made worse by added financial strain. And while 68% of surveyed individuals said they plan on getting life insurance at some point, they may continue to procrastinate.

To reach this audience quickly and underscore the importance of coverage, carriers must lean into brand awareness and consumer education.

The “buy online” movement is accelerating quickly

Regarding shopping preferences, the trend among Latinos mirrors the broader movement toward digital methods. For context, LIMRA reports that in the last decade, there has been a 55% decrease in interest in offline life insurance shopping. Of those Hispanic Americans surveyed, over half preferred buying online — with a whopping 71% of Gen Z and 54% of Millennial respondents saying they’d prefer a digital life insurance shopping experience.

Gen Z will outpace broader population growth in the next couple of years as they age into the milestones that tend to be precursors for buying life insurance. The oldest wave of Gen Z turned 26 this year, highlighting a massive opportunity for insurers to get in front of this market early and often with timely and relevant content and to be ready with the kind of online experience modern customers expect.

When it comes to life insurance, the demographics, needs, and expectations of the marketplace are constantly shifting. If you don’t remain curious about those trends (along with what’s driving them and how to leverage them), you risk falling behind. The Hispanic American insurance shopper is there. The question is, what is your organization doing to serve them?

Conclusion

FAQ

Why do underserved communities have lower life insurance adoption rates?

Many individuals in underserved communities face financial challenges that can make it less of a priority to understand how life insurance works and why it may be important. Outside of that knowledge gap, there are gaps on the institutional side, as well — particularly when it comes to meeting markets where they are, and providing access to affordable coverage.

What are the main financial barriers preventing people from buying life insurance?

The primary barriers include limited liquid savings, competing financial priorities, and perceived affordability concerns. Many consumers lack awareness about the actual cost of coverage and available options that fit their budget, which contributes to low adoption rates across various demographics.

How are consumers' preferences for buying life insurance changing?

Consumer preferences are shifting dramatically toward digital channels. The insurance industry has seen a decrease in offline shopping, with more consumers expecting convenient, online purchasing experiences that provide faster access to coverage and align with modern shopping behaviors. However, many of these same customers still expect to speak with a professional at some point in the process — in fact, they may actually prefer to lean on the expertise of agents and advisors in tandem with a smooth, digital experience.

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