As a life insurance agent, you should always be aware of emerging markets that could stand to benefit from life insurance and financial planning. From child-free married couples to high net worth young professionals and the growing population of wealthy individuals from countries like Brazil and Russia, it’s essential for insurance agents to be on the lookout for the next great market in need of wealth or retirement planning services.
That’s why attention needs to be paid to the LGBT community. Gay and lesbian rights activists have been making headlines for the better part of the last decade and most recently by President Obama with the crusade to ensure equal rights under the law for same-sex couples. The community is coming into its own when it comes to pulling the attention of companies looking to cash in on a growing demographic.
According to the Williams Institute, a research organization at UCLA with a focus on LGBT issues, the gay and lesbian population has a lot going for it, financially speaking. The institute examined data culled from the latest census, and just under half – 46 percent – of people in same-sex relationships have college degrees, compared to less than a third of people in heterosexual relationships, reported Life Health Pro. As is often the case, with greater education comes greater wealth. The same study found that same-sex couples brought in $8,000 more per year compared to their heterosexual counterparts – $94,000 versus $86,000.
The LGBT data
Just what does the landscape look like for the LGBT community? Prudential recently compiled data regarding this segment of the population by surveying more than 1,400 people who identified as lesbian, gay, bisexual and transgender. Of those surveyed, the majority – 64 percent – described themselves as “fully out,” while 28 percent said they were “mostly out” and the remaining 8 percent said they were not out at all. The population was relatively evenly distributed – 22 percent of respondents were between 25 and 35, 28 percent were 35 to 44, 28 percent were 45 to 54, and 22 percent were between 55 and 68.
Prudential found that the LGBT community lands somewhere in the middle when it comes to attitudes and actions regarding their finances. On the Prudential Financial Confidence Index, LGBT respondents landed squarely in the middle at 48 out of 100. The survey also found that, though gay men also tend to be the focus of the media when it comes to buying power, lesbians are also a force to be reckoned with. With an individual income that is higher, on average, than that of other women, lesbian households tend to have incomes on par with their gay male counterparts due to the fact that many homes are dual income.
Life insurance and the LGBT community
Members of the LGBT community are movers and shakers in the economy and life insurance agents would be well-advised to pay special attention to them. According to Prudential, “despite some outreach by the financial services industry to the LGBT community, study participants rank the industry’s attention to their financial needs low.”
While LGBT insurance customers are, in many ways, largely similar to heterosexual clients, there are differences that are worth noting, George Walper, Jr., president of Spectrem Group, told Marketwired.
“At first glance, the profile of the affluent LGBT investor is similar to the wealthy non-LGBT investor,” he explained. “But there are key differences. Wealthy LGBT investors tend to have less diversified portfolios, while demonstrating higher social media use and a preference for conservative investing. Wealthy LGBT investors also have unique needs regarding their trust and estate planning. They want to work with professionals who are familiar with their financial challenges, whether those professionals are attorneys, financial planners, bankers or financial advisors.”
LGBT Americans also noted that they were less confident about how prepared they were for their financial future compared to the population at large, with just 14 percent indicating that they were well prepared, while 29 percent of the non-LGBT population said they were financially confident.
Tapping the market
So how do insurance agents take advantage of this burgeoning population? It starts with outreach. As Life Health Pro suggests, there are plenty of online social media groups that can be joined to connect agents with the LGBT community. There are also LGBT-targeted publications, community centers and events that are available.
Becoming an LGBT-friendly agent or organization is a great way to open the doors to a community that is gaining both wealth and influence.