For many product/service marketers, Millennials are a prime target. This is true for the life insurance industry which is proactively marketing its products to this group of Americans born between 1981 and 1996. Not only do they represent 72.24 million Americans (Statista, 2022 data), but nearly 47% of them say they need to purchase more life insurance (LIMRA, “It’s time to help get more Millennials insured” 2022). There are several drivers which are prompting Millennials to purchase life insurance. Understanding them can help brokers, agents, and carriers alike capture new sales from this prime market.
In its “Life Insurance Trends 2023” report, Capgemini cited the following catalysts for Millennials’ increasing interest in and purchase of life insurance:
- More convenient access to real-time information through digital channels,
- Carriers’ increased efforts in educating Millennials about the affordability and value of life insurance to support one’s financial security,
- COVID-19 which a LIMRA survey found has prompted 45% of responding Millennials to indicate they are more likely to buy life insurance because of the pandemic, and
- Simpler application processes such as: digital platforms, single underwriting question, flexibility to purchase online or in an in-person meeting with a broker or agent, and tailored solutions designed to engage the younger demographic.
Helping Millennials Make the Best Decisions
To ensure that Millennials make the right life insurance purchase, it is important that they gain a solid foundation of knowledge regarding different life insurance products, factors that affect price, underwriting, and considerations for purchase. Insurance professionals, need to be proactive in helping Millennials understand these factors:
- Different types of life insurance: term life insurance, whole life insurance, indexed universal life, variable life insurance;
- Factors affecting cost: age, health and medical history, gender, policy type, coverage amounts, and credit standing (which is a criterion in certain states); and
- Underwriting factors including three risk factors to determine premiums (i.e., super preferred risk class, preferred risk class, standard risk class), as well as other factors that affect one’s risk profile (i.e., marital status; race and sexual orientation; current credit score; and number of existing life insurance policies).
By taking a proactive approach, insurance professionals can help Millennials gain the financial protection and security they need.