These days, those in the life insurance industry are looking for a number of ways in which they can boost enrollment numbers, and many are particularly focused on young adults who may be starting families and building up significant financial wherewithal. However, studies show that this generation is also the one most likely to be a bit reticent to get involved with this type of coverage, for a litany of reasons.
For instance, a recent study from the industry group Life Happens found that nearly 3 in 10 of millennials say they'd rather save for vacation than invest in life insurance, and 3 in 5 believe that paying for other expenses in their lives - such as cell phone, cable, and internet - was more of a priority for them, according to a report from Reuters. This data likely comes as little surprise to those in the life industry itself, as many have probably struggled to get young adults to sign up for coverage in the last few years, even if those people know that they could significantly benefit from doing so.
What's the disconnect
One of the biggest issues here, of course, is that many young people just don't think they need life insurance coverage in the first place, the report said. In some cases, that may even be true of young adults who now have children, especially if they have some amount of life insurance coverage through their employer. But that can also create a dangerous problem, as many millennials may not fully understand the coverage they get through work, which tends to have extremely limited benefits that are, often, only really used to replace a year or so of salary in most cases.
Certified financial planner Shannah Compton Game told the news organization that one of the reasons many in the life insurance sector may have problems getting through to young people these days is that they might think it's something they don't need, or indeed can't afford, the report said. They're going to tend to be young and healthy, which helps to contribute to the misconception that they're "not ready" to think about life insurance, but they also tend to dramatically overestimate the cost of such coverage.
An industry-wide shift
With all this in mind, it seems that the life insurance industry is finally adapting to what these young people want to hear, the report said. If they don't want to hear about how they're going to die one day, that's fine, because these policies also carry other major financial benefits, and highlighting these is often a good way to draw in young prospects. Moreover, many life insurance issuers are now also creating more flexible policies that should better appeal to how young people see the importance of such coverage over time.
The more life insurers can do to connect with young adults in the coming years, the better off the entire industry is likely to be, as the health of the industry may depend heavily on that ability to attract millennials in the coming years.