Life insurance is a contract with an insurance company. In an exchange for premiums (payment), the insurance company provides a lump sum payment (Death Benefit) to the beneficiary in the event of the death of the insured. Typically, it is chosen based on the needs and goals of the owner.
Term life insurance provides protection for a set period (5years, 10years or 15years) while permanent life insurance such as whole life and universal life insurance provides lifetime protection. It is important to note that, death benefits from all type of life insurance policies are tax free. A range of factors, however, can influence Africans living in the United States decision to purchase life insurance, and cultural and religious considerations are among them.
In the case of Africans living in the United States, there is a prevalent perception that they are less inclined to purchase life insurance policy. In a recent interview with Oral Ofori, Editor at TheAfricanDream.net, Lawrence Ankrah walked us through some of the reasons behind why some Africans in the United State shy away from purchasing life Insurance policies.
Mr. Ankrah is a licensed Insurance Agent with Health Markets, Inc serving the Maryland, Washington DC, Virginia and New Jersey areas of the United States who is originally from Ghana. His firm Health Markets is a top national distributor of health insurance from well known providers focusing on the needs of small businesses and families.
He offers a consultative approach to meeting client needs and a portfolio that includes health, supplemental, life, disability and long term care insurance as well as retirement and Medicare plans. In this interview, he also shed some light on the importance of life insurance within the African community:
Oral Ofori: What makes Africans in the U.S. reluctant towards life insurance policies?
Mr. Ankrah: One key factor contributing to Africans living in the United States not purchasing life insurance is poor understanding of the benefits of life insurance. The concept of life insurance may be new to some Africans because they are coming from a culture where communal responsibility and interdependency are preached.
This interdependency is prominent in the current trend with GoFundMe and contributions from friends and family. These two have become an acceptable norm in the African community. They make it difficult for them to reconsider the little contributions they get from these sources and invest in life insurance instead.
Many Africans living in the United States may have competing financial obligations, such as supporting family back home, education, rent/mortgage, expenses, or securing stable housing. Consequently, investing in life insurance may not be perceived as an important or immediate priority. There are also those who need too much life insurance, but their income does not support the policy so they get discouraged outright or when their financial situation changes, they cancel the policy.
Some Africans may have reservations about the reliability and transparency of the insurance company and the agent representing the company. Trust is a crucial aspect when considering any insurance product and building trust within the community can bridge that gap.
There’s also the case of superstition and cultural beliefs. Some African culture may associate discussing death or planning for one final stages in life with bad luck and may hinder many from getting life insurance. Others may have certain reservations because of religion. Some African religion is simply against the idea of life insurance, it is considered gambling and unacceptable.
Oral Ofori: Why should an African in the diaspora consider a life insurance plan?
Mr. Ankrah: Life insurance provides a financial safety net for the dependents/beneficiary in the event of the death of the policy holder/owner. The benefits can cover funeral expense, pay for rent/mortgage, and provide an immediate income replacement for the family. It also allows individuals to leave a legacy for their loved ones, in the form of inheritance for future generations, support charity or educational funds.
Having life insurance brings peace of mind, knowing that loved ones will be financially secure even after the death of the policyholder. It eliminates concerns about leaving a burden of monetary responsibility on the family.
The income of the person that passed is also immediately replaced by the death benefit. The family can continue to live their normal lifestyle. Also, all death benefits from life insurance are received tax free.
Oral Ofori: How can taking up life insurance policies increase in the African community?
Mr. Ankrah: Insurance companies, community organizations and financial professionals can collaborate and organize workshops to provide education and understanding of the importance of life insurance and its benefits to the African community. Prominent individuals within the African community including religious leaders, community organizers, influential figures, MC’s /DJ’s can play a vital role in promoting the value and importance of life insurance and dispel misconceptions.
Life insurance products must be designed to align with cultural and religious values.
Insurance providers should also make efforts to understand the cultural nuances and specific needs of the African community. Insurance products must be tailored to address these needs to make marketing these products easy. They should also be transparent with the product they present without any hidden clauses or difficult to understand verbiage. The product must be easily accessible, followed by a working phone number.
Oral Ofori: Trust and selling the message seems to be an issue sometimes huh?
Mr. Ankrah: Yeah, trust has always been a big issue when it comes to Africans getting a life insurance. Life insurance Professionals must be trusted by building a good relationship within the community. Agents should know their product and understand how it works before introducing it to the African communities in the Diaspora.
These and other strategies can be put in place to help the African community living in the United States and elsewhere gain trust, understand the value and importance of life insurance and hopefully start purchasing life and other insurance policies.
Source: TheAfricanDream.co
Abeeb Lekan Sodiq is a Managing Editor & Writer at theafricandream.net. He is as well a Graphics Designer and also known as Arakunrin Lekan.
