Purchasing life insurance is challenging for many adults and millennials, those born between 1981 and 1996, are no exception. Perhaps, they are even more confused than older adults, which could explain the gaps in their coverage. In fact, 50% of U.S. millennials have no life insurance. Insurance advisors have a role in changing this by addressing millennials’ concerns, financial challenges, and overall lack of understanding regarding life insurance – what type to buy and how much.
Millennials’ Concerns and Financial Challenges
Let’s start with why millennials are not buying life insurance. Here are the top reasons:
- Many believe they simply cannot afford it and generally think life insurance is far more expensive than it is.
- Millennials carry over one third of the federal government’s $1.6 trillion student debt which is causing them to delay getting married, buy homes, and have children – the triggers which cause individuals to purchase life insurance.
- Millennials are unaware of the flexible and affordable options available for purchasing life insurance.
Advisors Can Make Buying Life Insurance Easy for Millennials
By educating millennials regarding life insurance and its importance in:
- Explaining why purchasing life insurance at a younger age will lock in a lower premium rate as opposed to waiting when one is older, since premium rates increase with age along with other factors.
- Showing them how they can access the cash value in certain policies and under certain circumstances to assist with unexpected financial needs.
- Educating them about the various types of life insurance (e.g., term, whole life); their features, and flexible coverage options, as well as other insurance they should also consider (i.e., short-term/long-term disability, critical illness, accidental death and dismemberment).
- Covering funeral/final expenses.
- Supporting survivors with expenses such as mortgage/rental payments, children’s education and childcare, and day-to-day living expenses.
- Serving as a valuable estate planning tool.
By making the millennial market a priority, insurance advisors can help ensure the greater financial protection, security and peace of mind for the U.S.’ largest generational group with an estimated population of 72.2 million.