By Stacker
- It’s estimated that 47% of Millennials need more, or any, life insurance coverage
- 73% of Millennials are living paycheck to paycheck, thanks to rising inflation, car loans, and credit card debt
Why are Millennials so much likely to be underinsured and what can carriers do to help close this gap? It’s estimated that 47% of Millennials need more, or any, life insurance coverage. Unfortunately, this underinsurance crisis is happening at a time when Millennials are getting married, buying homes, and having children, milestones that make having life insurance coverage essential. Everly Life examines why this underinsurance crisis is hitting this particular generation so hard and what can be done to close this insurance gap.
7 Reasons Millennials Aren’t Getting More Insurance
Data reveals that there’s an underinsurance crisis that’s being felt by millions of Millennials just as they’re making major life decisions and as it turns out, this crisis could result in partners and loved ones not having financial protection at a time when they may need it the most. In their most recent Insurance Barometer Study, LIMRA and Life Happens identified seven critical drivers behind this phenomenon:
- Perceived cost (48%)
- Other financial priorities (35%)
- Procrastination (30%)
- Not sure how much or what type I need (29%)
- Don’t like thinking about death (15%)
- It is not offered by my employer (14%)
- No one has approached me about it (9%)
It’s worth noting that Gen Xers and Gen Zers are also feeling cost-conscious; both generations marked perceived costs (52% and 39%, respectively) and other financial priorities (38% and 40%, respectively) as the top reasons why they don’t have enough (or any) life insurance coverage.
Financial Anxiety: How Increasing Costs Add to the Insurance Gap
It’s not surprising that “perceived cost” is listed as the top reason why Millennials don’t have life insurance, considering that they’re currently experiencing significant financial demands and pressures unlike generations before them. In fact, a 2023 study found that a whopping 73% of Millennials are living paycheck to paycheck, thanks to rising inflation, car loans, and credit card debt.
Millennials are also more likely to be grappling with medical debt than other generations, with 11% citing medical bills as a top reason for debt. Comparatively, only 8% of Gen Zers and Gen Xers and 6% of Baby Boomers listed medical bills as one of their primary debt drivers.
The costs of caregiving whether it’s paying for childcare or taking care of aging parents are also taking their toll on Millennials. In a Goldman Sachs report, 79% of surveyed Millennials said that caregiving will undermine their own progress towards retirement goals, while 64% had either paused saving for retirement or drawn down their savings.
The end result: a generation of would-be policyholders who feel pressured to put their money towards other priorities rather than life insurance coverage.
The Path Forward
While the Millennial underinsurance crisis may seem like a generational issue, the truth is that it’s an industry one. Education barriers, coupled with pricing misconceptions and outdated marketing, have made it so that younger Americans are choosing to forgo coverage simply because the perceived value of a policy doesn’t stack up to their competing financial priorities.
For carriers to close this gap, the emphasis should be on value creation, showing up where Millennials are actually shopping, and building more affordable and transparent products.
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