Life insurance costs and concerns for millennials plus types of insurance most important to young people. 26% of millennials had trouble affording their insurance, and 25% are already worried about covering their insurance premiums in 2024.
Survey by Insuranks for more than 1,000 millennials about their perceptions surrounding life insurance discovered that 53% do not own life insurance, 48% want it. The ages surveyed millennials was ranged from 27 to 42 with an average age of 34. 57% were men, 41% women, 1% non-binary, and 1% would rather not say. Beinsure offers you the most important from the report.
The main reason life insurance holding many of millennials back? Finances and confusion surrounding the insurance process
Two of the biggest challenges facing insurers struggling to earn millennials’ business are that this customer segment does do not want to buy from a limited option set or buy without fully understanding the value of what is being offered.
The fast-growing millennial population, roughly 72 mn in the United States – about 25% of the overall population, is a hot topic in boardrooms and executive discussions.
Why? Because the popular assumption is that “millennials” as a demographic segment have a huge liking for digital channels, which invokes a unique set of needs and preferences, and businesses have to engage with them differently than they do with Gen-X or boomers.
Deloitte’s studies in the financial industry have shown around 80% of potential beneficiaries plan to look for a new financial advisor once they receive their inheritance. While there’s no guarantee this trend will hold true within insurance, if it does, this would be a large shakeup and a large opportunity for savvy agencies and producers to go after a whole new client base.
A study calls boomers “historically the most reliable customer base” for insurance, particularly life insurance. But, the study notes, this is changing.
Millennials and Gen Z will soon outpace baby boomers as the industry’s top customers, as long as insurance companies and agents can prove themselves valuable to younger generations.
Types of Insurance Most Important to Millennials
The three types of insurance most important to millennials are: health insurance, auto insurance and homeowners or renters insurance.
Life insurance was ranked the fourth most important. However, millennials admitted they have refrained from getting life insurance due to the higher costs of other types of insurance.
28% millennials who don’t have life insurance think they don’t need it. But 17% millennials who are married shared they’d experience financial hardship within a month if their significant other passed away, and 50% would experience it within six months of their loved one passing.
Capgemini’s Life Insurance Top Trends report highlights the importance of digital evolution in the insurance industry and millennial preferences. By putting customers first and addressing pain points, insurers can see significant positive impacts on their business and retain customers.
Is it Better to Get Life Insurance When You’re Young?
Many millennials appear to already have regrets about not getting life insurance earlier in life with nearly 29% wishing they got life insurance when they were younger.
Of those with life insurance, 19% got it when they were 21 or younger, but on average, millennials with life insurance got it at age 27.
Nearly half who don’t currently have life insurance want it, and 82% think having life insurance is important. Overall, when choosing insurance, millennials say the most important thing to them is cost followed by coverage and policy flexibility.
Why Millennials Are Not Buying Life Insurance?
The millennial generation has reached adulthood and must now make adult decisions and should buy life insurance while they are young. Many are still on the fence about the choice when choosing life insurance. Others need to gain an understanding of what makes this investment so important.
Female millennials are left out of the insurance conversation. In a world striving for financial equality, solving this problem is critical, and from a commercial perspective, addressing this problem enables our industry to unlock a currently underserved market segment.
There are several reasons millennials do not have life insurance, but the most common reason is cost.
In fact, 66% millennials shared they’ve not gotten it just because it’s too expensive. Others explained it’s because they have no family to support or that they are overwhelmed by the complexity of it all.
Many millennials appear unsure about what to ask when getting life insurance or any type of insurance. Survey statistics show that 55% are confused by the overall process of getting insurance.
According to Capgemini’s research, improved customer experience through automation empowers agents and customers with advanced digital tools.
This helps form authentic relationships with beneficiaries as early as possible and guides the next generations of policyholders through upcoming asset transitions.
The report stated that the first step in enhancing customer experience is empowering agents and customers with advanced digital capabilities.
Why Millennials Get Life Insurance?
Of millennials who have life insurance, the majority got it to help with end-of-life costs such as funeral and burial expenses. The other main reason for investing in life insurance was to support family living expenses, provide money for children, and alleviate debt.
More than 55% have whole life insurance compared to 40% who have term life insurance.
Over 33% got life insurance when they started working their first job, 27% got it while starting a family, and 14% got it after getting married.
So, are millennials buying life insurance? The short answer is yes. At least some millennials are buying it, but others are holding off because of cost concerns or confusion surrounding the insurance process. This process can be difficult to understand and navigate but don’t let it intimidate you from making important life decisions.
At the same time as the insurance industry will experience a new pool of potential clients, it’s also losing a large number of seasoned employees.
Fewer professionals focusing on more consumers means insurance carriers and agencies need to have their systems dialed in. Because these new consumers and their wealth won’t stick around if companies have bloated operating expenses that get passed along to the client. Nor will millennials stand for slow and poor customer service.
It’s also worth noting that one of the greatest challenges for insurance industry organizations will be attracting and retaining employees to care for tomorrow’s insurance consumers. Getting your house in order by adopting systems that make employee’s lives easier will make your organization more competitive to potential talent.
Reviewed by Yana Keller