Why are millennials avoiding life insurance? Here are 4 reasons
Millennials are simply waiting for someone to guide them through the process and make it easy to purchase when the time is right.
There is a $16 trillion gap in U.S. life insurance coverage, according to LIMRA, a worldwide insurance industry research, learning and development organization. A lot of that falls at the feet of millennials, those born between 1981 and 1996. They are least likely to carry life insurance, even if they are married with children. More than 75% of millennial parents, in fact, are uninsured, according to Bestow, an online life insurance platform.
More than 75% of millennial parents are uninsured.
Why is this? Especially when many call millennials the most risk-averse generation in decades?
We wondered. So we asked more than 300 of them. We wanted to know why they didn’t carry life insurance (if they didn’t), and, more than that, what would compel them to engage with a life insurer.
4 reasons millennials are saying “no thanks”
Here are four things we learned:
1. They don’t know where to start
Surprisingly, the millennials we surveyed said they might consider purchasing a life insurance policy, but they didn’t know where to start. At least not in the ways and through the channels millennials are accustomed to.
For example, a recent article by Policygenius, an online insurance broker dedicated to making insurance buying simple and easy, encourages millennials to purchase life insurance and, if it is their preference, to seek out carriers who accommodate customers digitally. Which leads us directly to the second thing we learned.
2. They want to do things digitally
As digital natives, millennials often make a decision about a company based on its digital footprint – and that’s beyond its website.
How does it communicate in social media? Is there an app I can download and use to communicate? How fast and responsive is the company if I reach out through Instagram?
“Nailing the digital experience involves more than providing extraordinary online customer service,” says Lauren Friedman, in her Forbes article, Millennials and The Digital Experience: Getting Your Digital Act Together.
“It’s using social media and technology in ways that create delightful experiences across all touchpoints,” she said, “from design and content to customer support and creating a seamless offline-to-online experience.”
3. They’ve got bills to pay
“I would increase my policy if we weren’t paying two student loans, a car payment and mortgage,” said one of our respondents. “Maybe once the student loans are gone.”
Many millennials, like this participant, have simply prioritized other bills over a life insurance premium. Part of the problem — which is loosely connected to reason No. 1: They don’t know where to start — is that millennials have a skewed view of the cost.
Millennials believe life insurance premiums are far more expensive than they actually are, up to five times more expensive, according to a Life Happens’ report. Millennials guessed the average annual premium to be about $1,000, when some annual premiums come in around $150.
4. They have no patience for the process
Millennials are of the opinion that the process to secure a life insurance policy is tedious and complex.
One of our survey respondents summed it up by saying: “Life insurance feels very complicated and difficult to learn about – if they could ‘dumb it down’ and show how policies, payments and the industry worked, it would be so helpful.”
It’s an interesting response, especially when you consider it against Life Happens’ survey results. The results show that 50% of respondents had never discussed life insurance with a parent, peer or life insurance representative.
Embracing a digital ecosystem for the win
What does all this mean for life insurers? It means that insurers who embrace digital transformation and innovation can succeed in a rich market of interested buyers.
Insurers who are innovative and quick to market have an advantage over the competition, but only if they reach out to millennials through the channels they like to communicate through. It’s a noble challenge, but one worth taking, as most millennials are simply waiting for someone to guide them through the process and make it easy to purchase when the time is right.
Insurers who increase investments in digital modernization strategies are 63% more profitable.
Embracing and investing in digital transformation can help fulfill that wish. In fact, insurers who increase their investments in digital modernization strategies are 63% more profitable on average than their industry peers who keep their IT budgets constant or reduce them, according to Gartner.
Hyland insurance solutions accelerate life insurers’ digital strategies by providing a complete view of the right information to the right people, where and when they need it. Serving as a content services hub, we smartly surface content in context by connecting data and systems across the insurance enterprise.
By providing users with easy, secure access to complete information – anytime, anywhere, on any device – we enable insurers to digitally transform and facilitate more responsive, meaningful interactions.
Ready to find out more? Download Millennials and the 22nd-century life insurer: Adapting your life insurance methodologies to the changing millennial market today.