People commonly turn to crowdfunding sites to pay for loved ones' final expenses. It's a concern that disproportionately affects Black families, and Kelly Rowland says it's time we talk about it.

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Credit: Courtesy of Kelly Rowland.

Kelly Rowland started financial lessons with her sons early. The singer, actress, and mom to Titan, 6, and Noah, 8-months, is big on passing down financial responsibility to her kids.

"Even at the tender age of 6, we are starting to teach my son about financial responsibility," she says. "Titan's uncle gave him $100 for doing well in school but said you can only spend $40—the other part you need to save. So when I took him to the toy store, he really thought about his decision on what toy to buy so that he could really make the $40 count."

It's small lessons like these that have a big impact on the way children think about money. "He's like this whenever he gets money now, and his stash is really growing," says Rowland. A bigger lesson she hopes to give to her family and to families everywhere is about the importance of life insurance.

In 2020, only about 54 percent of Americans owned a life insurance policy. A growing number of people turn to crowdsourcing sites like GoFundMe to pay for burial and funeral expenses for loved ones. It's a concern that disproportionately affects Black families.

Because of the cumulative effects of systemic racism and discrimination, the net worth of the average white family is about 10 times more than that of Black families. Without a financial cushion, families are often one crisis away from going into substantial debt. It's often a vicious cycle, and Rowland says life insurance can break that cycle for a family's next generation.

"When you protect your loved ones financially, you're eliminating the financial scramble that so often happens when a loved one passes away," she says. "Alleviating debt is a huge part of passing down generational wealth."

While many think of life insurance policies as coverage providing a one-time payout to cover a loved one's final expenses, Faisa Stafford, president and CEO of the financial and insurance awareness nonprofit Life Happens, says life insurance is not just about death. Though one silver lining of the pandemic, she says, is that more people understand the importance of life insurance—especially in Black communities where COVID deaths were disproportionately high. 

Black Americans have the highest COVID-19 death rate than any other group in the U.S., according to the National Center for Health Statistics. And although a 2021 study found that life insurance rates went up among Black Americans during the pandemic, there's still a significant gap between the number of insured and the number of Black Americans with financial strain. Of those covered, Stafford says they may not have the right type of insurance. "The pandemic has made us more aware of our mortality," she says. Still, of the benefits various life insurance policies offer, there's more to a life insurance policy than payouts for funeral expenses.

Term life and whole life insurance—the two main categories of life insurance—both offer death benefits, but whole life comes with additional benefits. According to NerdWallet, whole life insurance also includes an investment component in the form of a cash-value savings account that policyholders can access funds from later in life. 

"Many people only have a final expenses policy, and we need to arm them with the knowledge that life insurance can help in so many more ways," Stafford says. "Life insurance is a great way to transfer wealth." 

To move the conversation about life insurance with family members forward, she suggests straying away from leading with death and instead tap into the phrase "financial security." Changing the narrative is especially important in Black communities, Rowland says, because the stigma around discussing death with elders keeps long-term financial planning at bay. 

Rowland's role as mother is her priority, and she wants to encourage other parents to "ask the questions and seek out the resources" to help them understand and get life insurance through her partnership with Life Happens. Like it has for many families, the pandemic has brought her closer to her kids and husband—and it emphasized the need for self-care. "It's hard to find time for yourself, but it is so important that you do," she says. For her, that looks like watching a movie and eating a good meal that matches the theme. It also looks like taking the time to have important conversations and lessons about financial security, the future, and plans with family.

"You make the time for what's important to you," she says. The time families take now to plan for and talk about things like life insurance can make a huge difference for their financial future. It's become increasingly common for families to have to raise money to pay for the expenses and take care of children left behind when a loved one dies.

"Life insurance breaks this cycle," says Rowland.