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Expanding Hispanic Market Underrepresented in Life Insurance

Life insurance agent Charles Rivera knows what U.S. Army generals mean when they talk about “boots on the ground.”

Rivera, a financial advisor with Eagle Strategies and an agent with New York Life, started his business in Wichita, Kan., more than 30 years ago.

There was a lot of ground to cover, he recalled.

Back then, there weren’t as many Hispanic prospects in Wichita and the surrounding communities as there are today. But why work in Wichita rather than the Hispanic meccas of Dallas, Denver, Los Angeles or Miami?

That was the point. He was one of the few Hispanic agents with boots on the ground in Wichita — at least back then.

Today, even in the internet age, a boots-on-the-ground strategy remains the game changer in the quest to crack the Hispanic market.

“We solve issues by knocking down the door and getting out into the community,” Rivera said.

Over the years, Rivera hasn’t changed his basic boots-on-the-ground approach, but Wichita and the Hispanic market around him, certainly have changed.

In 2014, there were an estimated 55.4 million Hispanics in the United States, making up about 17.4 percent of the population, census data show. That population delivered $1.5 trillion in buying power, economists estimate.

Even with slowing population growth, by 2030 Hispanics will number an estimated 78 million in the U.S., or 22 percent of the population, census projections indicate. The bulk of the Hispanic population is concentrated in two states: Texas and California.


Pavement Pounding, 2016 Style

Nearly every insurance agent, Rivera included, has a story about knocking on doors. But “boots on the ground” takes on a more figurative meaning in the 21st century than it did in years past.

These days it means getting involved locally, showing your visibility, raising your profile to a higher level than in the past. In Rivera’s opinion, Hispanic agents lead best by example.

“What I do speaks louder than what I say,” Rivera said.

Serving on the board of a community nonprofit organization or a local or state Hispanic Chamber of Commerce, or as a trustee of a community college or a state university, provides the kind of visibility Rivera’s talking about.

The higher the profile, the more visibility it will generate, which is important to capture the attention of Hispanic prospects, Rivera said.

Raising visibility helps agents network with other professionals such as accountants, bankers and lawyers. When these professionals see you as the “go-to” person, “that’s an important entrée into the Hispanic market,” he said.

Face time and making an in-person case for buying life insurance are considered critical to sales success, Hispanic market researchers say.

“We know that showing up strong in the community also drives trust in our brand,” said Jaime Morales, a Chicago-based agency owner for Allstate.

When it comes to setting financial priorities, buying life insurance lags behind saving for retirement, reducing debt, building emergency savings and funding education for future generations. That’s according to a 2014 Prudential research study on the Hispanic-American financial experience.

Only 28 percent of Hispanics owned workplace-based life insurance, compared with 47 percent of the general population, the Prudential survey found. In addition, the survey found only 25 percent of Hispanics owned individual life insurance, compared with 37 percent of the general population.

Pounding the pavement is considered table stakes in the fight for the Hispanic financial services dollar, and there’s no substitute for pressing the flesh.

“The ad world can do all they want, but it’s not going to get done until you get out there and shake hands with the guy who owns the bakery or the tortilla company,” Rivera said.


Receptive Yet Reticent

Hispanics may have trouble ponying up for life insurance premiums, yet they remain as receptive as ever to life insurance products, according to Strategic Business Insights’ 2014-2015 MacroMonitor Hispanic Oversample.

Asked whether they would seriously consider buying insurance that guarantees income in case of a disability, 66 percent of Hispanics said yes, compared with 60 percent of non-Hispanics.

To the question of whether buying life insurance is a good way to protect a family’s lifestyle, 71 percent of Hispanics said yes, compared with 70 percent of non-Hispanics.

When asked whether it’s important to have enough life insurance to cover three years’ worth of household expenses, 71 percent of Hispanics said yes, compared with 64 percent of non-Hispanics.

Asked whether they have enough life insurance, 63 percent of Hispanics said they don’t, compared with 50 percent of non-Hispanics.

And 62 percent of Hispanics said buying life insurance is a good way to save for the future, compared with 49 percent of non-Hispanics.

A separate New York Life survey last year of Hispanic business owners found that 58 percent said life insurance offers peace of mind and 46 percent said they didn’t want to burden their families and their children when they die.

Although Hispanics recognize the importance of life insurance, objections conspire to hold them back from purchasing it, writes Felipe Korzenny, director emeritus of the Center for Hispanic Marketing Communication at Florida State University.

Some of those objections include cultural beliefs grounded in fatalism, the fact that some Hispanics come to the U.S. with little or nothing to insure, the obtuse and opaque terminology found in life insurance, and the fact that insurance isn’t required in many Latin American countries.

Among Hispanic business owners, 37 percent said they don’t see the need for life insurance coverage, 32 percent said they can’t afford it and 19 percent said they are too young to consider purchasing it, according to New York Life.

Selling life insurance to Hispanics remains a high-touch proposition to which many of the basic sales principles still apply, particularly for Hispanics new to the U.S.

An estimated 70 percent of Hispanics prefer to buy their policies through face-to-face meetings, said Nilufer R. Ahmed, senior research director with LIMRA.

Agents said that some of the ways to connect with this market are by emphasizing what life insurance products can do for a family, dressing to suit a prospect’s economic standing and never faking their Spanish.


A New Dynamic: Life and Wealth Transfer

More recently, an important new variable has begun to influence Hispanics’ life insurance buying patterns: the role of education.

The level of education attained by second-, third- and fourth-generation Hispanics in the U.S. means they are earning college degrees in record numbers. Research shows a correlation between acculturation and purchasing life insurance.

Among U.S.-born Hispanics, 20 percent had a college education, compared with only 12 percent of foreign-born Hispanics in the U.S., according to the U.S. Census Bureau.

Hispanic communities across the country have a long history of entrepreneurship. Hispanic business owners operate successful restaurants, markets and other enterprises, and new arrivals continue to launch new ventures.

As more acculturated Hispanics attain higher education levels, they move into segments of the economy such as utilities, logistics and distribution, and manufacturing, said Hector Vilchis, corporate vice president of New York Life. In response to the increasing role of Hispanics in the U.S. economy, New York Life has tripled the number of its Hispanic-focused agents to nearly 2,000 over the past 15 years.

Among the top Hispanic-owned businesses in the U.S., six had annual revenues of more than $1 billion, according to a 2014 listing by They are Brightstar Corp., A. Millican Crane Services, Technology Transfer Services, SDI International, The Related Group and Goya Foods.

And Hispanics are aspiring to success outside the business world as well. For example, U.S. Labor Secretary Thomas E. Perez, the son of Dominican immigrants, and Supreme Court Justice Sonia Sotomayor, whose parents are of Puerto Rican descent, carry Hispanic blood into the highest levels of government.

So it won’t be long before benefactors with quintessentially Hispanic names — Diaz, Marquez, Perez and Rodriguez — start showing up on stadiums, arenas and museums as well, and that is leading to a new conversation with agents.

Transferring wealth to the younger generation through life insurance is a topic Morales said he regularly discusses with his customers. “We talk through their goals and how to achieve a secure financial future,” he said.

As the Hispanic market’s “generational build” gathers steam, Hispanic business leaders increasingly are asking agents how to protect and transfer wealth.

For many agents as well as clients, putting these strategies in place represents a new stage in financial planning, Vilchis said, since the idea of generational wealth in America is a new concept for many Hispanic families.

With parts of the Hispanic market starting to generate substantial wealth, the pavement worth pounding may well become exponentially bigger. 

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected] [email protected].

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