Racial/Ethnic Differences in Life Insurance Ownership & Life Insurance Adequacy

This research aimed to measure racial/ethnic differences in life insurance ownership and life insurance underinsurance among Black, Hispanic, White, and Asian/other consumers. Using the 2019 Survey of Consumer Finances, probit regression analyses were utilized to determine whether there is an association between race/ethnicity and owning life insurance and whether there is an association between race/ethnicity and life insurance adequacy in relation to the respondents' human life value. Results show that Black households had a higher probability of owning life insurance and Hispanic and Asian/other households had a lower probability of owning life insurance when compared to White households. Hispanic households had a higher probability of being underinsured compared to White households. Use of a financial planner was associated negatively with underinsurance. Implications for financial professionals are discussed.