Did you know that Millennials are expected to inherit more than $17.8 trillion? Gen Y is a substantial group, and these future business leaders are quickly leaving their mark on the world. With all that Gen Y is experiencing, it makes sense that they are the future life insurance consumers. But does Gen Y know the role that insurance could play in their life? Even today.
Here are a few reasons why life insurance is particularly important to Gen Y:
1. Life is Expensive
Gen Y is a generation that has learned how to spend money that they do not even have yet. Yes, that sounds like a weird concept to some older generations but with so many Gen Y consumers going to college and pursuing a degree, their debt has piled up higher than ever. According to a Wells Fargo survey, 64% of Gen Y paid for college with student loans, compared to only 29% of boomers that did the same. Since many millennials don't have their own credit established at a time when they need to borrow funds, a lot of them are required to have loved ones co-sign this debt alongside them. And, the debt doesn't stop there.
One should also consider the credit card debt incurred by Millennials. This generation has grown up in a world where actual cash-in-hand to buy the newest coolest gadgets is not a necessity. With easier-than-ever access to credit cards, Gen Y has racked up large credit card bills, a feat that most other generations did not have accomplished until later in life. So, how is that relevant to needing life insurance, you ask? Having a life insurance policy helps to ensure that Millennials' large debt does not get passed on to their loved ones—loved ones that may so generously have signed the dotted line with them.
2. It Has a Long Shelf Life
As previously discussed, the Gen Y consumer ideally needs life insurance much earlier in life than past generations. Since this generation has begun to accumulate debt at a much younger age, with still a lot more life to experience, Gen Y-ers have several options to choose from when it comes to life insurance. Term life policies are ideal for the Gen Y consumer because they premiums are predictable and are very affordable. As the name suggests, the policies are offered in terms and available for 10-, 20-, or 30-year periods.
One reason that makes term life most ideal for Millennials, besides the lower cost, is that these policies are usually able to convert into a permanent life insurance policy at any time up until the term has matured. Advantageously, this can often be done without having a health exam requested by the provider.
3. It's Provides Financial Support
In today’s society, it is much more socially acceptable to raise your children as a single parent. The percentage of families headed by a single parent more than tripled in the past few decades. And, with this number steadily increasing, Millennial single parents can have the peace of mind knowing that their children will be provided for, in the case of an unexpected death.
It is clear to see that Gen Y is the new generation of life insurance buyers, but there are some things to keep in mind with this tech-savvy group. Although all generations prior to Gen Y have had the opportunity to purchase a life insurance policy, one must remember that Gen Y is a different kind of consumer. Also known as the Internet Generation, this class of consumers can hardly remember life prior to digital life, and because of that, they need to be reached a little differently than past generations.
In today’s world, life insurance options, education on the subject, and the ability to purchase policies online are readily available, so you need to figure out how you'll compete in cyber space for their eyeballs, their attention, and their trust. As this generation gets older and they begin to purchase life insurance, it is clear to see that the way it is offered will also change with the times. This is a new generation of life insurance, and the new consumers of life insurance.