Life insurance is a concept that is largely unfamiliar to the average college student or early twenty-something. Having no dependents in most cases, a large percentage of millennials simply don’t see a need for considering life insurance at such a young age.
In a recent story on The Street, a study by a life insurance industry trade group was cited, in which it was estimated that “only 20 percent of Americans in their 20’s and early 30’s say they are likely to buy life insurance.”
With age and good health generally in their favor, millennials are in a prime position to capitalize on highly attractive price breaks, according to Idowu Koyenikan, a principal consultant at Grandeur Touch, LLC interviewed by The Street.
“Millennials need to act quickly while they still have both on their side. Millennials who act now, get to lock in those rates.”
While most singles assume that, without dependents, they have no real need for life insurance, often that is not the case. Non-profit organization Life Happens suggests that singles dismissing life insurance might want to reconsider. In particular, individuals with “substantial debt you wouldn’t want to pass on to surviving family members” are advised to consider term life insurance options.
Taking aim at securing the next generation of subscribers beyond the Millennials, many life insurance advocates are actively promoting life insurance policies for young children and even newborns. The purpose of such policies is not only to cover expenses and unforeseen costs in the event of tragedy, but also so that one can cost-effectively “invest in a 20-year term life insurance policy for (a) child that will provide coverage even into their college years.”
Additionally, marketing materials targeting potential life insurance customers appear to increasingly target the Millennial generation, such as a recent post on the personal finance blog NerdWallet. The post titled, “5 Clever Hacks for Buying Life Insurance” provides prudent financial advice on shopping for life insurance, offering suggestions related to learning about “pricing bands,” adding chronic illness riders, and evaluating so-called “ladder policies” to most appropriately cover liabilities over time. However, framing the seemingly mundane topic of life insurance cost savings strategy likely resonates more with a generation raised on iPads and social networking when presented as “hacks.”
In the wake of the financial crisis of 2008, financial services firms and life insurance companies are struggling to regain trust with the Millennial demographic. According to a recent CNBC report, in an effort to combat that phenomenon, several large life insurance providers have recently acquired niche financial services firms that specialize in meeting the unique needs of millennial customers. Scott Tangney, executive vice president of Makovsky, summarized the challenge facing the life insurance industry as they struggle to gain traction with an online-savvy, and perhaps more financially cynical generation in Millennials.
“Millennials are much more sensitive to negative news about the industry. And they are looking for better service through digital channels.”
[Image Credit: Adam Berry / Getty Images News]