August 18, 2023
The life insurance industry in the United States has always had a serious problem in my book: lack of minority representation. According to the Life Insurance Marketing and Research Association (LIMRA), only 12% of life insurance agents are Black or Hispanic. This is even though these two groups make up over 30% of the U.S. population.
There are several factors that contribute to this lack of representation. One is that minorities are often less likely to have the financial resources to become life insurance agents. Let’s face it, starting off in the industry requires some savings or financial support from someone else. As much as we talk about the ability to make 6-figures off the bat, for most people it takes time to work up to that, in the meantime there are bills to pay.
This isn’t a new phenomenon, since the beginning of the industry in the US, people of color have always been on the outside of this industry. A few, who I will highlight in coming weeks, made big gains for a time, but were never brought into the core of the industry. Systemic discrimination from insurance companies and other industry gatekeepers continues to keep minorities from being “in the room where it happens” all too often.
Another factor is that minorities are often not as familiar with life insurance as white Americans. This is due to several factors, including unconscious bias, lack of access to industry connections, cultural barriers, and outreach from anyone telling them what is possible. I will come back and detail these out in future posts.
This lack of minority representation has many negative consequences, including:
There are a number of things that can be done to address the lack of minority representation in the life insurance industry. One is to provide more financial assistance to minority students who want to become life insurance agents and to create more training and mentoring programs for minority agents.
It is also important to educate minorities about the importance of life insurance and make it easier for them to get the information they need. This can be done through outreach programs, community events, and other initiatives. However, we need to hear from more people that we relate to about the power of life insurance and what it can do to help break the generational curses that lie on so many in our community. Influencers should be willing to partner up with industry professionals to get the message out and the time is NOW!
Externally, it is important to challenge stereotypes about minorities and promote diversity and inclusion in the life insurance industry. This can be done by working with industry organizations, government agencies, and other stakeholders. If the industry were to invest in this community, they would be rewarded by capturing another multi-billion-dollar market that they are missing altogether right now. The government would help financial level up many communities that would then be able to increase tax rolls while reducing benefits need from the government. Lastly, community stakeholders would find new partners that would be more empowered to help them carry out their missions.
One more thing for the life insurance industry, as they can take a number of additional steps to address the lack of minority representation. One step, and yes, this will be controversial, is to have unconscious bias training for all employees. This training can help employees to identify and overcome their biases. The industry can also provide scholarships and financial assistance to minority students who are interested in pursuing careers in life insurance.
The life insurance industry can also make a concerted effort to recruit and hire more minority agents. This can be done by partnering with minority organizations and attending job fairs in minority communities. The industry can also create internship programs and mentoring opportunities for minority candidates. This needs to be done at both the captive agency level and the independent marketing organization (IMO) level.
By taking these steps, the life insurance industry can become more representative of the population and better serve the needs of all consumers. You may still be asking, but why? Well…
According to the LIMRA, the following are the rates of life insurance owned in the US by varying minority groups compared to white Americans:
This data show that minority Americans are less likely to own life insurance than white Americans. The Federal Reserve paints a bit of a rosier picture with their stats but it is clear that life insurance is not for all Americans. The reasons are many, including:
In my opinion, the reason it is like it is, is that this way maintains the status quo and an object at rest stays at rest.
It is time to move this boulder.
The life insurance industry has a responsibility to address the lack of minority representation and the disparities in rates of life insurance ownership. By taking steps to unconscious bias training, providing scholarships and financial assistance, and recruiting and hiring more minority agents, the industry can become more representative of the population and better serve the needs of all consumers.
If you are a member of a minority group and are interested in a career in life insurance, there are a number of resources available to you. The Life Insurance Council of America (LICA) has a mentorship program for minority students, and the National Association of Insurance Commissioners (NAIC) has a list of scholarships for minority students who are interested in pursuing careers in insurance.
Additionally, do just a little bit of digging and you will find captive and independent agencies, such as mine, that are looking to connect with you and show you how to turn this job into a purposeful and impactful career.
To those in the industry that want to make a change, let’s connect, put together some initiatives together, even though we work for different companies. Collectively, we can put the right kind of pressure on the carriers, IMOs, and FMOs to invest in this issue and start to see some change. Black, Asian, Hispanic, Native American, or any minority group that wants to see change for their community should band together around the ideal of generational wealth building with Life Insurance at its core. I know one group of people that have done this, and it seems to be working pretty well for them.