Monica Rangel, an insurance professional and Mexican American, works hard to inform the Hispanic community regarding life insurance.
Efficient Financial and insurance solutions in Brea, Calif. is the founder and CEO. She regularly assists her community members to obtain life insurance coverage. These are some of the most common misconceptions that she sees from her Hispanic clientele.
1. If something happens, we can always rely on family or loans.
Monica claims that this myth is the most common in the Hispanic community. Many clients believe that their children will provide for them, or that extended family members will help them in times of crisis. Loans can be used to cover any additional money. She says that “Your children are not your retirement plan.”
As we go through life, we know that we can count on our families to support us. Your family would be affected financially and emotionally if you died. It is not the right time to try to raise funds for funerals or deal with financial stress.
Life insurance might be an option that suits your budget, so it doesn’t happen.
2. My children will get life insurance for free.
Monica’s clients believe it is important that their children learn to earn money. They want their children to learn how to work hard to get the things they want in a world where “nothing comes free”.
Recent Data From the 2022 Insurance Barometer Study By Life Happens and LIMRA shows that Hispanic Americans are slightly more likely than other races and ethnicities to say they value hardwork and that their life insurance policy doesn’t make them richer (35%)
You were taught hard work by your parents, and you should be teaching your children the same. Life insurance is not about giving your children a financial windfall. It’s about teaching and practicing the principles of financial responsibility.
Monica says, “Isn’t it our responsibility as parents to help children learn to be better than we are?” We came to this country for better lives, the “American Dream.” We also immigrated here to provide better opportunities for our children. We should use the knowledge we have gained here to help our children achieve financial success. We should give them tools like life insurance to aid them.
Planning for the future with life assurance is a lesson about goal setting, budgeting, and discipline that can help you or your loved ones be financially secure. This is a valuable lesson to share.
3. If I have life insurance, I will “jinx” my self.
Monica said that some of her Hispanic clients are afraid that life insurance will make them miserable. They fear that they will be punished if they get coverage.
She laughs, “The grim reaper is the image that I have in my mind.” “I swear the grim reaper doesn’t follow me around!” Life insurance companies would go out of business if that happened.
According to the same Barometer Study, about 25% of Americans feel comfortable discussing end-of life planning. However, Hispanics are less comfortable with those conversations.
It’s not something you want to be doing. It’s easy to put off things like annual doctor visits or getting your car serviced. Tomorrow is not guaranteed. It is easier to have difficult conversations about life insurance if you are more familiar with it. This article contains more information on how to talk about life insurance with loved ones.
4. I will leave this earth with only a few dirt particles. It’s a good idea to “live it up” while you can.
Monica says that many of her Hispanic clients believe that living life to its fullest is what they are striving for. It’s cultural to see living in the daily grind as a way of life. It’s a cultural thing to think of living paycheck-to-paycheck, even in Spanish songs.
The Barometer Study supports this sentiment. It shows that paying monthly bills ranks high in the top five financial concerns for Hispanic Americans. However, it is not true for other ethnicities. The 46 percent of Hispanic respondents are concerned that they won’t be able to meet competing financial priorities.
It’s all understandable… bills. Rent or mortgage. Car payments. Childcare. Food. Gas. You could go on and on. What would happen to your family financially in the event that you die? Your income will go with you, but your family’s bills and expenses will not change. Life insurance helps you pay the bills if money is tight.
Monica advises clients that it’s okay to live life up, but that you should also make sure you are taking care of yourself. Let’s live it up today but also let’s make a plan so that you can live it up tomorrow.
5. I will lose all my money and get nothing back.
Monica claims that life insurance is often misunderstood by her clients. They view it as other types of insurance, where payments are made “just in case” but don’t receive anything in return.
She is quick to inform clients about the various types of life insurance. It is possible that your beneficiaries won’t get a death benefit with term coverage if you die before the term ends. However, permanent insurance will provide you with lifelong protection as long as the premiums are paid. Your beneficiaries will get a payout upon your death (based on the insurance company’s claims-paying capacity), regardless of whether it is next month or 40.
This myth can be dispelled by permanent insurance, which is also known as living benefit. These policies can accumulate cash value over time which you can use while your still alive to pay anything you want, such as a down payment for a house or income for retirement. (Accessing the cash value will reduce the death benefit).