Generational wealth and the importance of life insurance for the Black family
Black History Month is a time to celebrate the achievements of African Americans and recognize our central role in U.S. history. You may ask, what does life insurance have to do with Black History Month and more specifically, the advancement of the Black family? Until the end of slavery in the U.S., enslaved people were considered valuable assets and a form of wealth for slave owners. While there have been significant improvements in wealth building for Black Americans post slavery, the pace has been relatively slow. Many Black Americans still find themselves trying to “catch up”.
Life insurance is one way to help provide a sense of financial security for your family and is something to be very proud of.
The wealth gap
Historically, Black Americans have been victims to discriminatory policies around housing, labor, and education that have limited wealth building in the Black community. The wealth gaps in the U.S. reveal the effects of these inequalities and discriminations.
According to the U.S. Census Bureau1, by 2020 the median wealth of White families was $74,912 while the median wealth of Black families was $45,870. Hispanic families’ median wealth was $55,321. These gaps are in part why building wealth can be so important to the Black family.
Why is generational wealth important?
Generational wealth is essentially wealth passed down from one generation to the next. It can be crucial for the security of any family’s financial future. Wealth can be passed down through a family business, stocks, real estate and even potentially life insurance. In fact, according to LIMRA, overall burial costs and final expenses rank as the top reason that Americans own life insurance, with helping replace lost wages or income as the number two reason for buying life insurance.
Imagine if your parents were able to pay for most or all your college tuition or student loans: this would most likely have a great effect on your financial future. According to a report by the Education Data Initiative, Black and African American college graduates owe an average of $25,000 more in student loan debt than White college graduates2. Instead of playing "catch up" to pay down student loan debt, you could be saving for your first home.
Importance of life insurance
We are not able to know exactly when we will pass away, but when that time comes, if you don’t have a life insurance policy, it could add a lot of burden to your children or other family members. What many people don’t realize is that their family could be held responsible for debts they leave behind. Life insurance may not only help pay for funeral costs or final expenses, but in some cases, it could be used for income replacement, mortgage/debt payoff, or supplemental retirement income. And, it’s a plus that payouts to the beneficiary are typically income-tax free. Also, having a life insurance policy outside of your employer-sponsored policies, could be helpful in-case of job loss or retirement.
Also according to LIMRA, one of the top reasons consumers don’t buy life insurance is because they think it’s too expensive. Luckily, there are policies that could work for your individual needs and budget. Help protect those who are most important to you. Contact TruStage® today to learn more about life insurance. Our experienced agents can help you and your family face the future with confidence.
Article by Taylor Kilgore, Social Media Implementation Specialist. Taylor is also a member of CUNA Mutual Group’s African American Engagement Resource Group.