Solutions to creating an equitable playing field in insur-tech, which is the intersection of insurance and technology, are reshaping this sector’s landscape. Life insurance can play a powerful role in helping to close the racial wealth gap as a tool that builds financial stability for generations. Companies like Insurance Elevated, founded by Eric Bosworth, are empowering independent agents by leveraging technology and cultural interconnectedness to make sure that customized insurance solutions lead to sustainable wealth transfer strategies.
The Breakdown You Need To Know:
One of the primary ways insur-tech can benefit Black families is by increasing access to insurance products. Historically, marginalized communities, including Black families, have had limited access to affordable insurance options. “Some of the barriers to entry for the Black and Hispanic communities is that they have felt insurance policies were too expensive for them” Eric Bosworth told CultureBanx GameChangers.
Specifically, Insurance Elevated with its plug-and-play sales system and an advanced CRM insurance solution seeks to get a large share of this insurance market while uplifting marginalized communities. “We decided to create a lead company that fed our life, health and annuities business while leveraging the strength of social media to grow the company.”
The innovative use of technology to enhance and streamline the insurance industry, holds significant potential to address racial disparities in insurance. By utilizing advanced algorithms, machine learning, and artificial intelligence (AI), insur-tech can improve underwriting and claims practices, enhance customer service, and provide more equitable access to insurance products.The Life Insurance & Annuities industry was valued at $1.1 trillion in 2022, according to research firm IBIS World.
Taking out a life insurance policy is another effective way for Black families to build generational wealth. “There’s no easier way to pass on generational wealth than to have a life insurance policy with named beneficiaries,” Scott Ford, president of affluent wealth management at U.S. Bank stated on the company’s website. “It’s a tax-free wealth creation tool that allows you to leave an even bigger legacy for future generations.”
Insuring Future Wealth:
A study released by the National Association of Insurance Commissioners (NAIC) in 2020 identified insurance as a major area where racial discrimination has had a long history. Practices such as race-based premiums and redlining were common until the mid-20th century, while more recent forms of discrimination include the use of big data and algorithmic models that can perpetuate existing biases.
Insurance plays a critical role in alleviating wealth accumulation issues. Life insurance policies, for example, can provide a financial safety net for families in the event of a loved one’s death, helping to cover funeral costs and providing income replacement or enabling wealth transfer.
Currently, Black families have the highest rate of life insurance ownership among all racial groups at 56%, compared to 52% for the total U.S. adult population. The major increase in these life insurance percentages came during the pandemic, which disproportionately impacted minority communities. This is something that Bosworth says “is great but not where we need it to be, as Black and Hispanic communities are just now seeing the value of these policies.”
Situational Awareness:
By leveraging the power of technology, Insurance Elevated is providing more equitable access to coverage, promoting fairer pricing practices, and ultimately helping Black families build and protect their wealth. While there is no single solution to closing the racial wealth gap, insur-tech represents a promising avenue for addressing disparities in insurance and promoting wealth accumulation among Black families going forward.
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