The concept was easy, but the challenges were many — to reposition life insurance in a way to create millions of dollars individually for Black families and billions collectively for the Black community.
Since John Merrick started the Black-owned North Carolina Mutual Life Insurance Company in 1898, the Black community has typically thought of life insurance as burial insurance — solely to cover the cost of a funeral. Initially started as a benefit for struggling Black families, these burial policies became a cash cow for large white-owned companies as they took over the industrial insurance or ‘burial policy’ market.
These burial policies were purchased for a few dollars a week, and the premiums were collected by an agent walking door-to-door. However, many of these policies did not payout more than $1,000 each, even if the insured had paid far more into the policy. The lack of money subsequently received by the families resulted in some having to scramble, and at times needing to beg and borrow for the remaining funds to pay for the funeral. This same situation played out for countless Black families over many years, and a general sense of distrust by the Black community, and ill-feeling toward life insurance companies and their stated benefits of the products they provide was created.
In contrast, a far different perspective is held by the white community, as many white families have purchased life insurance as a financial tool to replace income, to obtain investment guarantees and tax advantages, and to leave financial legacy gifts to future generations and organizations they love. The life insurance industry pays out tens of billions of dollars every year by way of inheritance, thereby creating generational wealth for white families. This resulting divide and disconnect from the Black community has been cited as a major current contributing factor to the racial wealth gap in America.
In seeking to change this disparity, and potentially close the widening racial wealth gap in America in just one generation, a Black agent-led movement was born at New York Life Insurance Company in 2011. Built around a unifying vision, which turned into a mission, and then a movement, these enlightened agents-of-change sought to insure 200,000 Black families with at least $250,000 of life insurance, to collectively create $50 billion of protection and tax-free future income (200,000 X $250,000 = $50 billion).
Calling it the $50 Billion Empowerment Plan, a key component in the repositioning of the life insurance product for the Black community was to convey its use — like a traditional car or home insurance policy. This meant it should be purchased with the intention to protect the “true replacement value” of the item insured — in this case, the hard-working parents and leaders of our Black families.
As part of the effort, the Black agents discussed the concept of what a “Black life is worth.” Not by material possessions or their job title, but by the future income that that individual would generate from the work that they did.
For example, a father making $50,000 a year for the next 20 years was seen as a million-dollar asset to his family ($50,000 X 20 = $1 million). And if he were to pass away unexpectedly from an accident or due to a disease like COVID-19, his life insurance policy would replace his lost income and could be invested, or leveraged, to properly provide for his family. From those policy proceeds, his family would be able to pay off the home mortgage, supplement his spouse’s retirement, and even pay for the college tuition of his children, etc.
After 6 ½ years, the New York Life agents crossed the $50 billion milestone of life insurance placed and maintained for Black families. Many tributes and recognitions took place for the accomplishment, including articles written in the Black press stating that 50 years after the passing of the Civil Rights Act, this group of 1,500 Black agents had now created $50 billion of financial protection and future income for our next generation.
As the proud founder and former manager of this $50B Plan, I am most excited about the outcomes and community impact we have witnessed over the last 10 years since launching the campaign. With over $1 billion delivered back to Black families as some of those insured individuals have passed away, the vision for wealth creation has clearly been coming to fruition. In fact, we have created a lot of millionaire Black families, where many of them had little wealth before. And this was not by chance, or from a winning lottery ticket, but because someone in those families sat down with one of our agents to put a financial plan in place to create a legacy and inheritance for those that they love.
My leadership team and I are now on a new mission to help even more Black families follow the strategies of the wealth campaign to create financial stability, economic opportunity, and multigenerational wealth. We are enrolling more Black agents and financial advisors from across the insurance industry to expand and amplify the successes of our former campaign with us.
With a new goal to create $500 billion for Black families, we are continuing to reposition and leverage the power of life insurance to build wealth, transform Black communities, and close the racial wealth gap.
Eugene Mitchell is the founder and principal of E. Mitchell Consulting Group for Financial Literacy and Financial Services. He is also a speaker and author of the book, Closing the Racial Wealth Gap—7 Untold Rules for Black Prosperity and Legacy, which is available on his website.