Insurance professional and Mexican, Monica Rangel works hard to educate the Hispanic community about life insurance.
The founder and CEO of Efficient Financial and Insurance Solutions in Brea, California, regularly helps members of her community get life insurance. Here are the biggest misconceptions she encounters from her Hispanic clients.
1. We can rely on loans or family help if something happens.
Monica says this is one of the most common myths she hears in the Hispanic community. Many clients like to believe that their children will take care of them or that extended family members will reach out in times of need; Any additional money needed could be covered by loans. But as she says, “Your children are not your retirement savings.”
We know that we can count on our families for support as we go through life. However, if you were to die, your family’s world would shift on its axis – emotionally and financially. A time of grief is not a time to collect funeral funds or endure the added stress of money problems.
Life insurance can be a solution that fits your budget to keep that from happening.
2. Life insurance will be a free ride for my kids.
It is important to many of Monica’s clients that their children learn how to make money. If “nothing comes for free” in life, they want to teach their children how to work hard and get what they need.
According to the most recent data from the 2022 Insurance Barometer Study by Life Happens and LIMRA, Hispanics are slightly more likely than other racial and ethnic groups to say they value hard work and don’t think someone should get richer from their life insurance policies (March 35, 2022). Percent).
Your parents taught you hard work, and you teach it to your children. But life insurance is not about leaving your children a financial fortune. It’s about practicing—and teaching—the principles of personal financial responsibility.
As Monica puts it, “Isn’t it our job as parents to help our kids be better than us? We came here for a better life, the ‘American Dream’. We immigrated to this country to give our children better opportunities. Why not use what we learned here to take a financial step up? Why not give them a tool like life insurance to help them?”
Preparing for the future with life insurance is a lesson in goal setting, budgeting and discipline that can help your loved ones be financially healthy – it’s a valuable lesson to pass on.
3. I will “hex” myself if I buy life insurance.
Monica says some of her Hispanic clients worry that getting life insurance might tempt fate. They think something bad will happen to them if they get cover.
“The image I have in my head is the Grim Reaper,” she laughs. “I promise the Grim Reaper isn’t following me! If that really happened, the life insurance companies would be out of business.”
Overall, only a quarter of Americans are comfortable talking about end-of-life planning, but Hispanics report being even less comfortable with these conversations, according to the same Barometer study.
We understand that talking about death isn’t high on your to-do list. Just like the yearly doctor’s appointments or finally the car service… it’s easier to procrastinate. But tomorrow is never guaranteed. The more familiar you are with life insurance, the easier these difficult conversations will become. For more tips on how to talk to your loved ones about life insurance, check out this article.
4. I will only leave this earth with a handful of dirt. I might as well “live it out” while I can.
Monica shares that many of her Hispanic clients feel that life is about living it to the fullest. “It’s very cultural to think about everyday life. Even in Spanish songs, there’s a common theme: ‘You’ll only take dirt with you when you die,’ so you might as well live it while you can.” She says this contributes to a paycheck-to-paycheck culture lives.
This feeling is supported by the Barometer study, which shows that paying monthly bills is one of the top five financial concerns for Hispanics, but not for other ethnic groups. This relatively high level of concern among Hispanic respondents (46%) suggests that many members of this group are unable to address competing financial priorities.
It’s understandable… bills, rent or mortgage, car payments, child care, food, gas. The list goes on. But what would happen to your family financially if you die? When you’re gone, so is your income, but their bills and expenses remain the same. When money is tight, life insurance takes over the financial burden for your family when you are no longer there to help.
What Monica tells her clients is, “It’s okay to live it, but why not pay for it yourself first?” Live it today, but let’s also strategize so you can live it morning to.”
5. I will lose all the money I have invested in the policy and will get nothing back.
Monica says her clients often misunderstand life insurance and think of it like other types of insurance where you make payments “just in case” but don’t necessarily get anything in return.
She quickly enlightens customers about the different types of life insurance. While it’s possible that with term life insurance your beneficiaries may not receive a death benefit if you die after the term expires, with perpetual insurance you have lifelong protection as long as you pay the premiums. This means your beneficiaries will receive a payout when you die (based on insurer’s ability to pay), whether that’s in the next month or 40 years.
Another way that permanent insurance debunks this myth is what is known as life support insurance. These policies can build up cash value over time that you can use while still alive to pay for anything you want, such as taxes. .
Working with an insurance expert like Monica is a great way to learn more and get coverage. Check out our helpful information on choosing a qualified insurance professional. Then use our Agent Locator to find one near you.