LOUISVILLE, KENTUCKY, UNITED STATES, October 19, 2023 /EINPresswire.com/ — Faced with mounting student loan debt and the daunting challenge of figuring out how to tackle resuming monthly payments, Black Americans, who are looking for ways to increase their wealth and build a better future for their families, are increasingly ignoring one of the greatest investments available to them today, life insurance. It’s a story that is all too familiar. Americans who seek to create a better future for their families go to college to earn a degree in order to open the door to better careers and higher wages. But education comes with a high price tag and Black Americans, who disproportionately lack the same level of generational wealth as their white counterparts, statistically face higher levels of debt. According to a report published in 2023 by the Education Data Initiative – a team of researchers with a mission to collect data and statistics about the U.S. Education system – Black and African American college graduates owe an average of $25,000 more in student loan debt than White college graduates. Furthermore, the study finds that four years after graduation, Black students owe an average of 188% more than white student borrowers. Other minorities including Hispanic, American Indian, and Alaskan Natives also face disproportionately higher levels of debt.(1) The newly released Saving on a Valuable Education (SAVE) loan repayment plan has been touted by the Biden administration as the most affordable student loan repayment plan ever, providing a pathway for more than 20 million borrowers to enjoy lower payments.(2) However, as with any income-driven repayment plan, as a borrower’s paychecks increase, so do their payments, with an outlook of up to 25 years of increasing income-based repayments until the loan is forgiven. So how can American borrowers, especially Black, Hispanic, American Indian, and Alaskan Natives, grow personal and family wealth as monthly payments continue to grow with their paychecks? Many young Americans have turned to get rich quick schemes, alternative assets, and collectibles, like cryptocurrency, collectible shoes, or multi level marketing while ignoring one of the most proven investment opportunities available to them. Life insurance policies provide a pathway to help policyholders pay off costly mortgages, clean out existing debts, and provide future wealth for family members. For individuals who have borrowed costly student loans from private loan providers, life insurance can also help pay these off instead of passing on the debt to co-signers. Whole life insurance policies, which accrue cash value, can even be used to help start or save an existing business. Household names like McDonalds and Disneyland exist today because they saved their businesses by borrowing against the cash values of their life insurance policies. The majority of young minorities across the US believe that life insurance is too expensive or don’t trust a predominately white salesforce who do not understand their needs or concerns. Time and time again these individuals have seen their families suffer after underinsured loved ones who paid into a small policy for multiple years passed away and left their families with meager payouts that barely cover end of life expenses. This is one of the many reasons why Mammoth Life has launched the only Minority Business Enterprise (MBE) certified Life and Reinsurance company in the US, in order to help historically uninsured and underinsured minorities invest in their family’s futures by changing the way life insurance is sold to underserved populations. “Insurance underwriting tables are the same for everyone. Fundamentally they look at age, health, zip code, and gender,” says Bryan Simms, Co-Founder and President of Mammoth Life & Reinsurance (MLRC). “But zip code is where you live so if disproportionately, people in lower income neighborhoods are seen as less healthy, underwriting doesn’t take any accountability to say ‘hey maybe this group isn’t as unhealthy or maybe we should be looking at them differently.’” This practice can lead to disproportionately high premiums, creating a higher barrier to entry for minorities looking to secure a life insurance policy. MLRC is working to change the equation by considering more factors unique to minority populations and providing life insurance products that can help build generational wealth for their families. Young college graduates are in the best position to secure a life insurance policy. In fact, the younger you are the better chance you have to lock in the best possible insurance rate. Healthy Americans in their 20s can secure a $250,000 policy for as little as $100 a month. This provides a higher starting point for their children, securing a guaranteed financial future for themselves and their families. And you can always increase the size of your policy as needed in the future. “The key is to start young and lock in your health status with a permanent policy that is accumulating cash. That way you can increase your limit every year as your family, income, and home costs grow without having to undergo more underwriting,” says Simms. “Changing your policy means having to go through the underwriting process all over again, leading to higher costs and premiums. The key is to get locked in when you’re young for the best benefits later in life.” Mammoth Life & Reinsurance Company was founded in 2021 as an inspired brand, reviving the legacy established by Mammoth Life and Accident Insurance Company, which was established in 1915 in Louisville, Kentucky by former slaves that pooled resources to self-insure after being marginalized and rejected by mainstream insurance markets. Mammoth Life’s mission is to deliver accessible and inclusive insurance products and solutions into the market aimed at the uninsured and underinsured life insurance demographics. MLRC is a nimble, responsive, data-driven distribution company leveraging its unique and proprietary product engineering capacity coupled with its consumer engagement technology and use of data science and generative AI. Sources:1. https://educationdata.org/student-loan-debt-by-race#:~:text=Black%20and%20African%20American%20college,more%20than%20White%20students%20borrowed2. https://www.whitehouse.gov/briefing-room/statements-releases/2023/08/22/fact-sheet-the-biden-harris-administration-launches-the-save-plan-the-most-affordable-student-loan-repayment-plan-ever-to-lower-monthly-payments-for-millions-of-borrowers/ Daniel Mutter MutterWorks +1 305-926-1792 [email protected]
Student Loans Increase Racial Wealth Divide, Life Insurance Provides New Path To Generational Wealth for Black Americans
