Why do Hispanics Lack Life Insurance
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By Eddy V. del Rio.
A family picnic
I wait for my Cuban coffee (Espresso) to be made, as I sit at a local café in Miami. I hear the espresso machines roaring, and the bursting sound like a steam engine, as they heat up the evaporated milk. While leaning by the café window, a short, gregarious man in about his mid-sixties, with his traditional baby-blue guayabera, and kaki cotton pants, approaches and starts engaging in conversation with me.
As we get to know each other, he asks me, “What do you do? You know your profession.” This of course is the common question, in this café, as everyone in the area usually converges in this spot, to mingle and find out the latest happening in Latin American and Miami politics. After I tell him about myself, he says, “Does this include life insurance, seguro de vida?” I said, “Yes.” He goes on to tell me, “Its’ (life insurance) a good thing my friend, but I am afraid, if I get it something will happen to me.”
Like our friend at the café, there are many Hispanics in the U.S. just like him that have that same sentiment. Why is this? Why do Hispanics, as a group, lack this form of planning compared to other groups in the US? I believe this trend is due to superstition and procrastination. It is safe to say, regardless of their ethnicity, people believe life insurance is primarily for those with a high net worth. This could be no further from the truth. If we make money, carry debt, or have children, life insurance is a must.
The U.S. is made up of 23 million small business companies, which of those 1.6 million are owned by Hispanics. Hispanics are also responsible for operating these small businesses, but in large part take on jobs that normally can be seen, as “Risky”. These business owners work hard at their business, but lack in creating a continuation plan for their business. Seventy-six percent don’t have life insurance policies, versus 48 percent of the general population. Less than a fourth of Hispanics participate in their employers’ retirement plans, compared with half the general population. (Source: MassMutual)
These facts are due to lack of understanding. Hispanics fail in planning or in the use of life insurance primarily for three reasons. One, lack of understanding of how insurance truly works, second, they believe it cost to much, three, procrastination, and four, just like our friend at the café, they are superstitious. The truth is we as a society; probably do not understand all the tools life insurance can give us.
How can we change these statistics? This can be changed through education and knowing the basics of life insurance. Life insurance does not only work, if you are to pass way. Yes, this is the main reason it was designed, but it can work in our life time. The reason, why I say this is because there are riders (clauses) that can be added to the policy. These riders can protect us in the event of a disability, terminal illness, fund college education, and create a steady stream of retirement income. Oh, yes, and the expensive part. Life policies do not need to be expensive, if done correctly; your policy can be designed just for you. My friends, we are all individuals, and are planning should be done individually. This is “Me” time, when it comes to your planning. Lastly, you decide if you want coverage for a period of time (Term) or your entire life (Whole/Universal). You do not even have to pay your whole life, if you do not want to. There is an end in site.
We need to change the statistics that 39 percent of Hispanics have life insurance. This decision like many can be difficult especially in tough economic times. The facts are if we do not plan, we are planning to fail, and this can be more tragic then a tough economic cycle. As a friend and fellow Hispanic, I urge you not to procrastinate anymore. You owe to yourself and your family at least to find out, what a basic coverage cost. This can be the best investment you can ever make.
Finishing my espresso, I realize I engaged in a great conversation with my new friend. It is through conversations like these that we can teach each other. It is simply through conversation; that procrastination, superstitions, and stigmas be eliminated.
Eddy del Rio is a financial advisor in Miami and local talk-radio (670AM WWFE) host on finance.
My first reaction to this article was “why single out Hispanics”? In a way, saying that Hispanics don’t obtain life insurance is implying we are irresponsible.
On second thought, this might be a sad reality. I don’t think responsibility has anything to do with it, though. I think the fact that so many Hispanics are working hard to make ends meet, might be more of a reason. Add on to that, the Hispanic culture usually has parents working hard to give what they have to their children, not themselves. So, in conclusion, I think the reason most Latinos do not have health insurance is because most of them prefer to use that money to help their children, then themselves.
I agree that it’s more a cultural thing than anything else. It’s customary in many countries for people to pay their medical expenses out of pocket and they include them in their monthly budgets like a routine expense because to them it is.
The article did try to make it seem as if Hispanics are irresponsible. It’s a culture thing and not an irresponsibility thing.
Mr. Dominguez, First of all, I want thank you for your comment. I agree with you whole heartedly that Hispanic work very hard to make ends meet, and as a whole show great drive and determination. Secondly, yes, Hispanics do give what they have to their children. I am Hispanic and have parents that given me all I have, and to this day still assist me in what I need. My parents have shown me their unconditional love every single day of my life. My goal is to one day be a great parent, just like them. However; this column serves the purpose that we need to know that insurance is available for us. If we educate ourselves, we can fine good coverage at affordable prices, and not fall prey to companies that cannot keep their promises. Life insurance serves the purpose of continuing our legacy, when we are not here, and assuring our children have a college education. Educating ourselves will give us the tools we need to be successful not only in our work, but as consumers. Thank you, once again. All the best!
Great Article, thank you!
Yes , I finally got mine , but it took me a good 3 years of thinking about it. Also the growth on our debt (mortgage , lans etc) pushed me towards it… We as a Hispanic community need to hear these things more often. Thanks for the article….
JD, thank you for your feedback. It is much appreciated. I am glad to hear of your decision. Eddy
Hi Eddy.
That is a very interest article. I will send to my friend that works as a Journalist in DC. She works for printed media and radio with an emphasis in Latin Life.
Charlie.
The only thing interesting, and not in a good way, is that it attempts to make Hispanics look like mierd$. This isn’t worthy of being published here or passed along either. Get real no sabes nada!
Muy buen artículo. Este blog es genial, suerte!
I see both sides of the insurance debate. I have health and life insurance, but I know that insurance is betting their payouts against my premiums that I won’t die or have a catastropic injury. They usually win the bet and that is why the insurance business is so lucrative. I’m not lamenting their success in this marklet, just stating the facts. What I like about insurance is that we are free to buy it or not (for now). I’ve lived in three countries, Italy, Spain and New Zealand, which all have socialized medicine. You may literally die before getting proper care under their systems. I like our old system much better. Good article.
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