Financial planner Delvin Joyce has worked hard to dispel myths that the Black community holds about life insurance.
The founder and president of Prosperity Wealth Group in Charlotte, N.C., regularly helps members of his local community get coverage. Here are the biggest misconceptions he encounters from his Black clients.
1. Life insurance is only for final expenses. Delvin says he frequently advises his clients that they need more than just “burial insurance.”
“They truly believe in life insurance, but sometimes they can’t see its usefulness beyond paying for a funeral,” he explains. To help them see life insurance’s many benefits, Delvin approaches the topic with a financial-planning objective.
“We discuss how it can help with income replacement, debt protection, paying for kids’ college educations, and more,” he says. Delvin also stresses the many ways that life insurance can help build wealth. Learn more about what life insurance can cover.
2. Life insurance will leave my kids on Easy Street. Many of Delvin’s hard-working Black clients fear their kids will become unmotivated if they receive an unexpected windfall. Delvin says he can understand their feelings.
“A lot of us had to pull ourselves up by our own bootstraps,” he says. “Fortunately, you can avoid that situation with proper estate planning and a living trust. This can help ensure your kids grow up with that same hard work, determination, and grit that you did.”
3. I have enough life insurance through my job. Coverage from your employer usually isn’t enough. Your employer can also trim or drop coverage at any time. Finally, you also lose that benefit if you change jobs, lose your job, or retire.
All these reasons underscore why most people need to supplement any coverage they get through their job.
4. Life insurance only benefits me if I die. Delvin says many of his clients fail to consider the many ways that life insurance can benefit them while they’re living.
“I tell them about chronic illness riders and how cash value accumulation in permanent life insurance can support their other financial goals,” he says. (Learn more about the living benefits of life insurance.) Delvin stresses that wealth building is especially important given all the recent focus on the Black-white wealth gap.
5. I don’t need something like $1 million of coverage. Delvin says clients often underestimate how much coverage their family really needs. That’s because expenses like a mortgage, car payments, future college tuition bills, and more can add up fast. Fortunately, life insurance usually doesn’t cost anywhere near what most people think. “People overestimate the cost of term life all the time,” says Delvin. “They’re usually pleasantly surprised at how affordable it really is.”