Shopping for and buying life insurance isn’t a top priority for the millennial generation – those born between 1981 and 1996 – despite major efforts by companies to ease sign-ups and lower costs.
A new survey of more than 1,000 millennials by Insuranks.com found more than half (53%) do not own life insurance, even though 48% said they want it.
Finances and confusion were the main reasons stated for holding back on purchasing life insurance, according to the survey. Also, a high percentage said life insurance wasn’t all that important to them after health, auto, and home or rental insurance. Life insurance was ranked the fourth most important. However, more than 1 in 2 millennials admitted they have refrained from getting life insurance due to the higher costs of other types of insurance. One in three, or 28%, said they didn’t think they needed life insurance. And a significant number, 29%, said they were overwhelmed by the complexity of life insurance.
Millennials ‘confused’ by process
“Many millennials appear unsure about what to ask when getting life insurance or any type of insurance,” the Insuranks report said. “Survey statistics show that 55% are confused by the overall process of getting insurance.”
At the same time, millennials appear to already be having regrets about not getting life insurance earlier in life with nearly 1 in 3 (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,” the survey said. “Overall, when choosing insurance, millennials say the most important thing to them is cost followed by coverage and policy flexibility.”
Though not stated, implicit in the Insuranks survey is whether life insurers are effectively marketing to the millennial generation. When was the last time you saw an ad for life insurance that seemed aimed those between 27 and 45? Despite a number of insurtech upstarts entering the field that seem designed for a younger, techno-savvy customer base, life insurance just hasn’t gained as a priority for millennials.
A ‘different kind of consumer’
“This generation is worse off financially than previous generations, but they’re also a very different kind of consumer,” David Kwon, an associate partner for insurance at IBM iX, told a writer for IBM Industries. “Carriers need to be digital-first and consumer-obsessed, just like millennials. Millennials are certainly interested in life insurance – as these numbers show. They’re just not sure where to start, or where the value is.”
While there isn’t a set rule for when to get life insurance, the most typical recommendation is to buy it while you are younger, the survey noted.
“It tends to be more affordable at a younger age, and at that point in your life, you’re less likely to be facing age-related health issues,” it said.
About a quarter of those surveyed said they were worried about covering their insurance premiums and nearly the same number admitted they had trouble affording insurance in 2023. At the same time, 22% said they expect to live to be 90 years or older. That coincides with a LIMRA study that found 17% of millennials and 24% of Gen Z adults say one of the reasons they don’t have life insurance is because it makes them think about their own mortality.
LIMRA also cited confusion
LIMRA also found confusion about the product was a top reason for not buying. It said the top reason respondents reported not having purchased life insurance was due to a lack of understanding about how much or what type of coverage was needed. ‘
“After a life-changing global pandemic, interest in life insurance has hit a record level,” LIMRA said, “a record-breaking 39% of Americans expect to buy life insurance within the next year. However, straitened economic circumstances have prevented many from purchasing the coverage they need.”
LIMRA found the parents of young children are more likely to own life insurance than the general population (59% versus 52%).
“There’s a popular expression these days: ‘Millennials killed [fill in the blank] – mortgages, marriages and avocados…” wrote Matt. A.V. Chaban, a content producer for IBM Industries. “Now, some want to add life insurance to the list.”