Over the last several years, one of the big items on the wish list of most people in the life insurance industry was a major buy-in from members of the youngest group of adults. For a number of reasons, not the least of which was a lack of understanding about how life coverage works, these millennials have largely stayed out of the market, until recently. But there may still be some hurdles to clear in this regard, and it's something for which the industry as a whole must prepare as it moves forward.

While data suggests that there are sizable relative gains being made in enrollment for life insurance among young adults, the fact of the matter is that these are still relatively small portions of the millennial population overall, because a 5 percent increase in enrollment in a very small sliver of that group doesn't amount to much in the big picture, according to a report from Benzinga. Studies show that millennials are more likely to be indifferent to or entirely disengaged from their primary insurance providers than any other age group, with only 31 percent "fully engaged." That's down from 34 percent among both Gen Xers and baby boomers, as well as 41 percent among the so-called "greatest generation."

Millennials are now starting families, but do they understand life insurance?

What's the issue?
Among the problems when it comes to getting young adults signed up for life insurance is the lack of perceived need, the report said. The vast majority of Americans buy their coverage when they start families, and many millennials have only started getting married and having kids in the last few years. Add in the fact that many also struggled financially during and after the recession, and may only be getting on their feet in this regard now, after years of work, and it's easy to see why they may not have made such a purchase before.

Further, many millennials have often cited other financial obligations they'd prefer to focus on instead, the report said. One study found that 54 percent would rather devote that money to cellphone, cable, and internet bills, while 38 percent would rather spend it on dining out or shopping. More than 1 in 3 say they are saving up to buy a new car or home instead, while more than 1 in 4 say they'd rather spend that cash on a vacation.

"Life insurance can take several roles to assist millennials in planning for their retirement," Adam Paoli, a financial strategist at a major firm, told the site. "Many advisors spend time on the significant tax benefits that cash value policies enjoy (similar taxation to Roth IRAs), and as most millennials are concerned about the potential of future increases in federal income taxation in their lifetime, this can be very important."

What can be done?
When it comes to connecting millennials with life insurance, companies have to approach the issue wisely, spelling out the benefits of life insurance even beyond income replacement, because many young adults simply do not understand the importance and structure of such coverage.