Minority household size and the life insurance purchase decision

This study uses the 1992–2010 Survey of Consumer Finances to analyze whether the likelihood of life insurance ownership and the face value amount of life insurance changes for minorities as household size changes. We find that the likelihood of life insurance ownership declines for Black and larger Hispanic families as household size increases when controlling for a variety of socioeconomic and demographic variables. There is also a significant decline in the face value amount of term life insurance purchased by Black families as household size rises. We provide possible explanations for these effects and also discuss implications for financial planners.