Among all demographics, Hispanics are the least likely to have a last will & testament in place. Why is it an issue that 82% of Hispanics do not have a will? While the net worth of Hispanic households remains less than the general population, there are important reasons why Hispanics should be a target audience for estate planning tools and financial products in 2022 and beyond.
According to the SBA, McKinsey and Business Insider:
- The Hispanic homeownership rate climbed to 51.1% in 2020, the highest level ever recorded
- 5 million Hispanic-owned businesses contribute more than $800 billion to the American economy
- The number of Latino-owned employer firms has grown by 12.5 percent annually, compared with 5.3 percent for White-owned employer firms
- Hispanic households with income of more than $75,000 have grown at a compound annual rate of 6.6 percent over the past decade
With growing incomes and home ownership, why aren’t more Hispanics completing a will to direct the disposition of assets? One reason is the belief that wills are only for the rich. “The general belief within the Hispanic community is that wills, and all financial planning topics, are only for rich people,” says Maria Victoria Colón, a certified public accountant.
Reaching Hispanics with a Simple Will
Attorney Carmen Rosas, who works with Hispanic households on financial and estate planning, adds her own perspective on why her clients haven’t protected their assets:
- They think they’re too young, and no one wants to talk about dying. We simply don’t want to face our mortality. No one thinks there will be an accident or that they might die tomorrow. No one likes admitting that it’s a possibility and estate planning requires considering (and preparing for) that possibility.
- They think they don’t have enough to protect. Everyone is so focused on their goals that they don’t think about protecting them while they’re in progress, mostly because of the reason above.
- They think it’s too expensive. Yes, estate planning is an investment upfront. However, if you don’t invest in it, your loved ones end up in probate court. That’s not only a financial expense, but it takes a lot of time, energy, and peace of mind amid great sorrow and mourning.
Based on these objections, creating a comprehensive learning platform and simple online estate planning tools could be a meaningful first step to help the under-willed Hispanic market be more prepared for end of life financial and medical decisions.
How to Reach The Hispanic Market
In order to drive wide adoption of a wills platform, you need to meet these customers where they conduct their everyday financial business.
Banks and Credit Unions
According to an Elevate study on The Hispanic Financial Experience, “Hispanics as a whole are no stranger to fintech tools. Those of the non-prime set (credit scores lower than 700) are more inclined to use mobile banking apps, make payments with their smartphones, and share money electronically.” Further, 69% of all Hispanic banking is done on mobile or tablet. Banks and credit unions can make a bilingual digital wills package available to Hispanic customers on their website and promote this availability via digital marketing, email and traditional marketing.
Life Insurers
According to LIMRA, almost half of Hispanic Americans (48%) say they would feel financial distress from the death of a primary breadwinner within six months. Yet 40% of Hispanic households have no life insurance. The primary reasons for this lack of ownership? “Competing financial priorities” and “cost” lead the reasons for not purchasing. Interestingly, the study also shows that 75% of Hispanic consumers overestimate the cost of life insurance.
Life insurers have a real opportunity to use basic estate planning and financial fitness education to support Hispanic household customers. Offering a low cost digital will, financial power of attorney and advance health directive can be a valuable package to introduce more Hispanic households to the value and ease of purchase of your products. This is especially true today, with most life carriers offering fast, intuitive, no invasive underwriting purchase platforms. As the study suggests, the focus should be on ease of purchase and low cost.
Property, Health and Auto Insurers
According to Pew Research, Hispanics focus on buying the insurance they need. This includes basic auto insurance and basic health insurance. The caveat with auto insurance particularly is the cost difference in coverage, so make sure you’re providing options for state-minimum liability limits (traditionally called “non-standard”). Providing Hispanic customers with simple online user experience will pay dividends more often than with other demographic groups – since Hispanics are more likely to stick with a solution they like.
Insurers should add inexpensive online estate planning as part of an overall “financial fitness” package for Hispanic households. This can further solidify your relationship with this demographic.
For any financial brand, spreading the word on products and services organically is a critical piece of the marketing puzzle. This has become especially relevant with growing social media platforms. Importantly, Hispanics are not only more likely to engage in word-of-mouth than the general public, but also more likely to pass along the information they hear to others. This is especially true of bilingual Hispanics.
The Opportunity
It seems that the growing influence and affluence of American Hispanics has not meshed with this important demographic’s need for basic estate planning. Hispanics are the second fastest growing demographic in the United States. 44% have had some college experience. Forbes notes “Hispanic income tends to rise with age, [so] we can expect to see continued rapid growth of Hispanics into the top-income quintile through 2028 and beyond. Not only can we expect incomes and spending power to grow over time, the Hispanic demographic’s relatively younger age also means a longer lifetime value for brands that cultivate loyalty.”
Forbes also noted that “The Hispanic/Latino consumers understand the value of money and how hard they had to work to get it. They aren’t going to throw it away for here-today, gone-tomorrow indulgences. They want to leave a legacy behind.”
A legacy is important to just about everyone, but especially so in Hispanic households. Financial brands that make estate planning tools more accessible to this market, and to the underserved mass market in general, will undoubtedly make a difference in the lives of these audiences by offering their financial products as part of a powerful financial wellness package.
LifeLegacy can help financial brands succeed by creating a white-labeled online estate planning platform that can be offered directly to prospects and customers. Contact Craig Simms, Head of Growth and Partnerships, today at craig@lifelegacy.io.
