We all know Millennials for several reasons. We know they tend to be more confident than other generations, sometimes too confident for their own good, even. Others claim millennials are the first digital generation. Marketing agencies love to target them, and studies show that millennials love to respond with credit card overuse. However, the insurance industry sees them as vulnerable. This is because millennials are not really thinking about purchasing life insurance coverage.
Several studies show that only 25% of millennials have purchased or at least considered life insurance. That means that more than 56 million young adults don’t perceive life insurance as a priority. As specialists have discovered, there are several reasons why millennials are not interested in getting life insurance. Generation Y considers it too expensive, has other priorities, and isn’t sure about the benefits that life insurance can bring.
Millennials Consider Life Insurance Too Expensive
One of the main reasons why millennials are not buying life insurance is because they consider it too expensive. According to a 2017 study by Life Happens and the Life Insurance and Market Research Association (LIMRA), millennials think life insurance is more expensive than it really is. The LIMRA survey found that millennials estimated that a healthy 30-year old person would pay a yearly cost of $500 to $1000 for a $250,000 term life policy. The actual cost of such a plan would be around $160.
Life Insurance Isn’t A Priority for Them
It would be wrong to assume that millennials are not thinking about their future. What happens is that millennials simply have other financial priorities before life coverage can become one of them. The same survey by Life Happens and LIMRA found that the majority of participants prioritize paying their living expenses like rent, utility bills, internet and cell phone bills, and even mortgage. Others said their priorities are other activities like going out with friends or eating out. Millennials also prioritize saving money for traveling and vacations.
They Aren’t Sure of The Benefits Life Insurance Carries
Despite the fact that they are the Net Generation, most millennials tend to ignore the actual benefits that insurance can bring. This happens because the majority of them are recently discovering financial independence. As they are buying their first insurance policy, the process tends to seem more complicated than it really is. As a result, millennials rather deal with the trouble later on, delaying the process and not really looking for options just yet.
Nevertheless, we must consider simplifying our policies and procedures in order to help Generation Y be prepared and covered for the future. After all, they are part of our market, and we want to make sure we help them make informed decisions and smart purchases without feeling confused or scared of our rates.