As millennials age into their early and mid 30s and begin to grow their families, they're going to need life insurance to protect their loved ones should something ever happen to them. But the problem for many of them is a high percentage of them currently do not own life insurance. As a consequence, this presents an excellent opportunity for those within the life industry to focus on these growing families within the next few years.
A look at the statistics
There are a number of issues that have kept many in Generation Y from purchasing life insurance in the past, according to a report from the consumer finance site Bankrate. Most of them probably just haven't needed it because they don't feel they have people in their lives they need to support financially. But another large group might have wanted it but believed it would be too expensive to buy. In fact, recent data suggests that about 7 in 10 Americans who don't have life insurance say they've shied away from it because other costs are taking priority.
But the fact is that for younger adults, the average policy can be extremely affordable, the report said. In many cases, these people are likely to pay less than $50 per month for their coverage, and that relatively low cost can be a huge relief in the event of an untimely death. Jack Dolan, a spokesman for the American Council of Life Insurers, told the site that most people have these perceptions of life insurance for various reasons, but they've never actually done the legwork to investigate whether their beliefs are reflected by reality. Other surveys have shown that consumers tend to overestimate the cost of coverage, and in many cases they do so dramatically.
What can life insurers do?
The problem is that most young people might not be aware of their options, and the concerns over the cost of life insurance may be clouding their decision-making abilities, the report said. Consequently, those life insurers who can best connect with millennials going forward - not just through sales pitches but actual education efforts that don't come across as them trying to sell something a person might not think they need - will be critical.
It is important to educate the younger generation as to the important benefits of obtaining life insurance to protect ones family. Marketing techniques that worked for the older generation might not work as well with the younger generation, so life insurance policies must be made attractive to younger people in other ways going forward if issuers are going to expand their client base.