LGBTI Americans face a shortfall in life insurance coverage

Those who identify as lesbian, gay, bisexual, transgender, and gay (LGBTQ) are insured with life insurance coverage, a position that financial professionals say leaves their families at greater financial risk.

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  • LGBTQ Americans have less life insurance coverage than the general population, according to a new LIMRA survey.
  • Only 38% of LBTQA adults surveyed said they had life insurance coverage, representing 7.6 million of the 20 million adults. In general, half of Americans own life insurance.
  • 43% of LBTQA consumers are more likely to purchase life insurance within the next year compared to 37% of the general population.
  • The Covid-19 pandemic has prompted one in five LGBTQ consumers to purchase life insurance coverage, not just think about it, at a higher rate than the general population.
  • Financial resources in general remain a major concern in the LGBTQ community. 48% of those surveyed worry about what will happen to them if they get sick or injured, but only 14% said they have disability insurance.

LGBTQ life insurance policy ownership tracks the general adult population

LGBTQ consumers have a 38% life insurance policy ownership rate. This is below the average for all consumers, which is 50%, based on A questionnaire conducted and Analyze it by Connecticut-based LIMRA and its affiliated non-profit organizations, life happensreleased this week.

However, the disparity in life insurance coverage is a concern. Limra said in a press release that 68% of LGBTQ respondents who were surveyed believe they should have life insurance. If the primary income earner in the family died, 45% of those making financial decisions in LGBTQ families admitted that their family would struggle financially within six months, while 30% felt they would struggle in just three months.

The pandemic has led to a spike in life insurance rates among LGBT consumers

Although LGBTQ Americans are less likely to carry life insurance policies than the general population, they said the Covid-19 pandemic has prompted them to purchase life insurance at a higher rate than the general market segment of the population, according to a recent survey by the life insurance company. professionals. Despite their low insurance status, one in five of those LGBTI consumers surveyed said the Covid-19 pandemic had prompted them to buy life insurance — five points higher than the general population, Limra said.

The LGBTQ community is already planning for the future of financial coverage

Despite the low coverage rate, more than a third of LBTQ respondents said they work with a financial professional while 26% plan to consult one. A financial advisor may focus on retirement planning, investment desires, and respondents’ concerns.

Next year, there may be more turnout. According to LIMRA, 43% said they were more likely to purchase coverage within the next year, compared to just 37% of the general population.

With 20 million gay American adults in the United States, the 38% coverage rate represents 7.6 million adults. Of those surveyed, half, representing 10 million people, said they need coverage or really need more coverage.

Multiple financial concerns, an obstacle facing LBTQ consumers

The reasons given by LGBTQ respondents for not purchasing life insurance stem from the perception that it is too expensive and that it competes with other financial priorities, according to LIMRA. Additionally, the LGBTQ community earns less and struggles more to make ends meet, according to Reports Cited by actuaries.

Areas where LGBT respondents have put their money into for financial planning purposes reveal heightened financial concerns. Limra found that LGBT Americans are more likely to disclose concerns about finances in many areas than the general population.

These concerns include providing for themselves after a disability or injury and having sufficient funds on hand for emergencies. Paying monthly bills, sufficiency in pension funds, credit card debt and home mortgages also topped the list of financial concerns of LGBT consumers. Other financial concerns include paying for the child’s education, burial, and funeral

Less than half, but a huge amount—more than a third to nearly half—of LGBTQ respondents have financial concerns about illness, injury, disability and long-term care services, but LIMRA found that three-quarters of them overestimated the cost of life insurance.

Many LGBTQ consumers go online for financial planning

The organization states that lack of knowledge remains an obstacle to the LGBTQ market, as well as others. The LIMRA survey revealed that a quarter of LGBTI Americans felt they were well informed about life insurance. However, the Internet is a resource and transaction hub for many when they seek information.

LIMRA also found that LGBTQ consumers are more likely to purchase life insurance online – 41% – than the general population market, which looks to the Internet to place life insurance about 30% of the time.

The LGBTQ community is turning to social media to learn about financial products, citing YouTube, Facebook, and Instagram as their best platforms. Despite this, the surveyed community identifying as LGBTQ is younger Adult Generation Z (The current Generation Z was born in 1997-2004) is twice as likely to identify as LGBTQ as millennials (1981-1996) and four times as likely as Generation X, according to LIMRA.

The online panel surveyed adult consumer financial decision makers in their families and LIMRA analyzed responses to show trends in market segments.