Financial Planning: Creating multigenerational wealth through life insurance

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Insurance, stocks and bonds, 401(k) savings and many more financial topics are often dreaded topics in the Black community. While many African Americans may be shying away from such topics, Black financial experts agree that investing in life insurance is a multigenerational wealth-building tool.

While it’s true that you have to have money in order to make money, that doesn’t entirely ring true with African Americans and Hispanics. Research has shown that while Blacks and Hispanics may be earning the same salaries as their Caucasian counterparts, the accumulation of wealth for Blacks and Hispanics is not nearly as the same compared to whites.

According to Mellody Hobson, president of Ariel Investments, “their chances for a comfortable retirement are significantly compromised.”

Studies have also shown that massive wealth gaps have attributed to less education and discriminatory bank lending. A study by Demos and the Institute for Assets and Social Policy (IASP) at Brandeis University revealed income levels of white households has wealth of $111,146, while the median for Black households is $7,113 and $8,348 for Hispanics.

“Just when I think I’m getting two steps ahead it’s almost like I’m being pushed back two steps. It’s very frustrating,” Arlene Johnson of Florida shared of her financial health.

While many Blacks and Hispanics may feel the financial burden each month, Eugene Mitchell, corporate vice president and black market manager at New York Life Insurance Co., has a different story to tell.

According to Mitchell, “other communities have used life insurance for decades to build wealth. Blacks now must make a priority to help boost their net worth, protect themselves and future generations.”

Financial experts like Mitchell believes life insurance can help Blacks create multigenerational wealth, keep assets such as homes and businesses and can amplify their nest egg for retirement just to name a few.

“The degree of increased buying power can have a much broader impact on the overall Black community instead of just assisting individual families,” Mitchell expressed.

With the revelation of such studies in pay disparity between Blacks, Hispanics and their white counterparts still the notion of saving investing behavior must be addressed.

Another study completed by the Financial Industry Regulatory Authority (FINRA) showed that white workers with 401(k)s tend to start saving in their 30s, meanwhile Blacks tend to wait until they are earning higher salaries—$100,000 or more. The research also revealed that Blacks are not comfortable with investing in stocks and mutual funds.

“While I’ve always wanted to invest I just cannot at this point and it’s very overwhelming,” Johnson said.

According to experts, life insurance is a great way to start investing or at least get the conversation started.

Mitchell believes that investing in life insurance can help Blacks by providing a level of protection, living benefits, and build wealth

“The money can be used for everything from paying for college tuition, enhancing a retirement nest egg, tithing to a church and funding charitable giving to create sustainable wealth and economic empowerment in Black America,” Mitchell said.

For more information about insurance and investing, visit

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Samantha Pounds is an avid reader, entertainment junkie and loves a good glass of wine. When she is not busy writing or researching she enjoys a career in public relations. A journalist by trade, Samantha received her B.S. from Indiana State University where she majored and minored in public relations and marketing. She also holds her A.S. in journalism.

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