Those who identify as lesbian, gay, bisexual, transgender, and queer (LGBTQ) are underinsured for life insurance, a position that financial experts say leaves their families at greater risk for financial security.
- LGBTQ Americans have less life insurance than the general population, according to a new study by LIMRA.
- Only 38% of LBTQA adults surveyed say they have life insurance, which represents 7.6 million adults out of 20 million adults. In general, half of Americans have life insurance.
- 43% of LBTQA users are more likely to buy life insurance next year than 37% of the general population.
- The Covid-19 pandemic caused one in five LGBTQ users to actually purchase life insurance, rather than just thinking about it, a higher percentage of the general population.
- Finance in general remains a major problem in LGBTQ populations. 48% of respondents are worried about what will happen to them if they get sick or injured, but only 14% say they have disability insurance.
LGBTQ life insurance policy is after the middle-aged population
LGBTQ consumers have a 38% life insurance policy ownership rate. That’s less than 50 percent for all consumers, based on a study conducted and analyzed by Connecticut-based LIMRA and its affiliated nonprofit, Life Happens, published this week.
However, the mismatch in life insurance coverage is a problem. LIMRA said in a press release that 68% of LGBTQ respondents believe they should have life insurance. If the main payroll employee in the family dies, 45% of those who make financial decisions in LGBTQ households admit that their families will have financial difficulties within six months, while 30% believe that they will face difficulties only for three months.
The pandemic has caused greater absorption of life insurance among LGBTQ consumers
Although LGBTQ Americans are less likely to hold life insurance than the general population, they said the Covid-19 pandemic prompted them to buy life insurance at a higher percentage of the market segment of the general population, according to a recent study by life insurance professionals. Despite their lower status, one in five LGBTQ respondents said the Covid-19 pandemic forced them to buy life insurance – five points higher than the general population, LIMRA said.
The LGBTQ community is already planning financial coverage in the future
Despite their lower coverage rate, more than a third of LBTQ participants say they work with a financial professional, while another 26% plan to consult one. However, the financial advisor can focus on retirement planning and the investment desires and concerns of respondents.
There may be more absorption next year. According to LIMRA, 43% say they are likely to buy coverage next year, compared to just 37% of the total population.
With 20 million LGBTQ adults in the United States, 38% coverage covers 7.6 million adults. Half of the respondents, representing 10 million people, said they needed coverage or actually needed more coverage.
Many financial problems, an obstacle faced by LBTQ users
The reasons given by LGBTQ respondents not buying life insurance stem from the perception that it is too expensive and competes with other financial priorities, according to LIMRA. In addition, the LGBTQ population earns less and struggles more to cover costs, according to reports cited by actuaries.
Areas in which LGBTQ respondents invest their money for financial planning purposes reveal increased concerns about money. LIMRA found that LGBTQ Americans were more likely to express financial concerns in many areas than the general population.
These concerns include alimony after injury or injury and the availability of sufficient cash on hand for emergencies. The payment of monthly bills, the adequacy of pension funds, credit card debt and their mortgages also topped the list of financial problems for LGBTQ users. Other financial problems include paying for the child’s education and funeral and funeral expenses
Less than half, but a huge amount – over a third to almost half – of LGBTQ respondents have financial concerns about illness, injury, disability and long-term care services, but LIMRA found that three-quarters overestimated the cost of life insurance.
Many LGBTQ users go online for financial planning
The organization says the lack of knowledge remains an obstacle to the LGBTQ market as well as others. The LIMRA survey found that only a quarter of LGBTQ Americans believe they are well-informed about life insurance. However, the Internet is a resource and transaction center for many when looking for information.
LIMRA also found that LGBTQ users are much more likely to buy life insurance online – 41% – compared to the general market, which looks to the Internet to run 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 its top platforms. However, the study community, which identifies itself as LGBTQ, is younger because Generation Z adults (current Generation Z adults were born in 1997-2004) are twice as likely to identify as LGBTQ compared to Millennials (1981-1996) and four times more likely than Generation X, according to LIMRA.
The online panel surveyed older consumers who make financial decisions in their households, and LIMRA analyzed responses to show trends in market segments.