Busting the myth that Millennials don't need life insurance
The Millennial generation, typically defined as persons born between 1981 and 2000, is the largest living generation in American society. They represent over $200 billion of annual buying power and boast a membership of approximately 80 million people.1
Despite vast numbers and significant buying power, Millennials are currently the most uninsured generation, according to a survey from InsuranceQuotes.com. Their rates of life insurance ownership lag behind that of Baby Boomers and Generation X. Perhaps Millennials, who are generally viewed as skeptical, are not convinced that life insurance is a necessary and cost-effective part of an overall financial strategy. Many Millennials believe that they are too young, too healthy, or in too much debt to worry about life insurance. Well, that’s a myth that needs “busting” immediately.
Millennials need life insurance just like any other generation. If a person has debt, owns property, has children, helps take care of aging parents, or has anyone who depends on his or her income, that person should have life insurance coverage. And, despite what many people mistakenly believe, group life insurance coverage through an employer is often not sufficient.
Let’s take a look at some of the myths that Millennials may have about life insurance that keeps them from taking the important steps toward owning adequate coverage. You will see that Millennials may be in a better position to purchase life insurance coverage than any other generation.
Myth #1: “Life insurance costs too much”
While “costs too much” is certainly a relative phrase, term life insurance is one of the few purchases that costs less today than 10 years ago. Very few consumers realize this fact. A recent survey conducted by LIMRA and the non-profit Life Happens foundation revealed that consumers believe a life insurance policy costs nearly three times its actual cost.
To show how premium prices have declined, compare the annual premiums for a 20-year term policy, with a $500,000 face amount, for a 40-year-old male, non-smoker, best class. The best rate for our example 40-year-old male in January of 1994 was $995 per year.2 If that same person wanted to purchase the same type of policy today, his premium could be as low as one-third of that cost.
Life insurance may be one of the best bargains Millennials can find today. Of course, cash flow can be problematic for the younger generation, but life insurance costs should be worked into the monthly budget just like any other expense.
Myth #2: “I’m too young for life insurance”
This myth has a certain irony to it. Younger clients may have a great need for life insurance if someone depends on them financially. And, the cost of an individual’s life insurance policy is determined by a number of key factors – one of those is age. With all other factors being equal, life insurance is less expensive for younger applicants than for older. Millennials have the opportunity to take advantage of the cost structure of life insurance by purchasing a policy at a younger age, before the policy becomes more “expensive.”
Lower ages mean lower premiums. It’s a great reason for Millennials to purchase life insurance – especially permanent life insurance – now, instead of later.
Next page: Busting “too healthy, too much in debt”
- InsureTech Spotlight: Hurdlr app lets agents track income, expenses and taxes instantly
- Insurtech Updates: Launches, expansions, partnerships and more
- NAIFA launches LACP designation as new ‘gold standard’ for life and annuity professionals
- Partial Fiduciary Rule implementation starts Friday – with no enforcement
- More than 8 in 10 advisors now use social media for marketing, researching prospects and building relationships
- Resources being rolled out to help with partial Fiduciary Rule compliance
- Best-ever start to a year for indexed life sales, new report says
- Diversity, innovation top agenda at Women in Insurance Global Conference