When compared to the generations before them, millennial families are not purchasing life insurance policies in similar fashion. SE2, a technology company focussing on North American life and annuity insurance, found that today’s financial burdens and “deep confusion about financial planning” are two big reasons for the decline and/or disinterest millennials feel towards life insurance.
More families are finding themselves at risk of financial collapse, based on SE2’s survey of 1,032 millennial families.
Some key findings from the survey reveal that:
- 65% of millennial families think about the future of their finances on a daily basis
- 43% have purchased life insurance
- 78% of respondents say their parents have life insurance
- 23% said they’d have to file bankruptcy if the primary breadwinner died
- 37% said this death would cause financial hardship for the whole family
Families growing up today are under particular hardships faced by few in the past.
“They face more student loan debt and other financial obligations than previous generations. They also face a more complex and confusing set of financial planning choices with the disposable income they do have. That can lead to a kind of paralysis – where millennials worry for their futures but don’t take the actions necessary to secure greater peace of mind,” said SE2 executive, Vinod Kachroo.
Student loan debt and other financial burdens weigh down the millennial family today. Who could think to add another bill to what seems like an endless stream?
Less than 10% of survey respondents said “they were simply uninterested in insurance or did not see its value.” Over half of those surveyed, 56%, said they actually do want to buy insurance in the future.
The deferred decision on life insurance is usually because there are other, heavier financial concerns for this generation.
Some reasons for bypassing life insurance found in the study:
- 30% cited student loan debts
- 29% cited plans and savings for a home
- 19% cited mortgage payments
- 30% cited the fact that “they simply couldn’t afford life insurance”
Too many expenses?
With so many options available to millennial families, people can become confused when it comes to financial decision-making, according to Coverager. Further, there was little more than a general understanding of life insurance based on the survey results.
- 46% of respondents said they might purchase life insurance if they knew more about it
- 23% believed it “was for older people”
- 18% believed it was too hard to obtain
- 10% said they didn’t know how to get life insurance
Reasons for these results include the fact that “Millennial families are less likely to have a trusted family insurance agent or financial planner than in previous generations,” according to Kevin Paulson from SE2.
Paulson continued: “It falls upon the insurance industry to meet millennials where they are by creating products, tools and processes that connect with how they live and buy financial products together.”
Overall, the study found that millennial families value insurance, but might just need access to more information. Once millennials realize how affordable certain insurance types are for younger people, perspectives might change.