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Millennials are the adults of the 2020s! In their search for financial wellness and financial certainty, they are taking on more financial commitments and looking for products that protect their wealth and grow future nest eggs. Life insurance is one of the most important building blocks millennials can use to achieve these financial goals.
Life insurance gives millennials a strong financial foundation
Millennials, those born between 1980 and 1996, are sometimes called the “later generation.” They are moving out of home later than previous generations, starting families later, and getting married later, if at all! Many millennials have questioned the value of traditional financial products, including life insurance. An interesting millennial life insurance statistic is that in South Africa, millennials between ages 30 and 39 are underinsured by an average of R1.4 million, according to the Asisa 2022 Gap Study.
But as a tech-savvy, questioning and mindful generation, they have also witnessed the benefits of life insurance and are appreciating the value it offers them and their loved ones. Millennials and life insurance are no longer seen as incompatible, instead, millennials are aware of how life insurance can help them meet many of the financial challenges they face and give them a strong financial foundation.
Life insurance meets many of millennials’ financial challenges
Millennials question everything! Unlike the baby boomers and silent generation, they don’t just accept that life is to be lived a certain way and certain financial products bought at certain times! For example, the shift away from marriage with children to cohabiting and/or single parenting is a strong characteristic of millennials’ lives.
However, millennials haven’t avoided life's financial responsibilities, or had it easy financially. Many have struggled to build their wealth and support themselves and their loved ones because of a number of different factors, all of which have made life insurance a must-have millennial product.
Financial shocks
Millennials have been through more than their fair share of financial shocks, starting with the dotcom crisis in the early 2000s, the global financial crisis in 2008, and of course the financial shocks many experienced with COVID-19 lockdowns.
Student and other debt
Globally, millennials are the most educated generation, but along with that has come high levels of student debt that needs to be paid off. In addition, millennials have personal loans and credit card debt, and those that have ventured into the property market have home loans.
Financial responsibilities
Fewer millennials may be married with kids, but most have extensive financial responsibilities. They care for children, sometimes as single parents, and many are starting to care for their parents, grandparents, siblings and other family members.
The need for more financial certainty has resonated with millennials, who are looking to life insurance as a way of ensuring their financial obligations can be met and loved ones cared for if they pass.
Early age deaths
Millennials have witnessed too many young deaths. For example, the high numbers of younger deaths in South Africa during the early 2000s due to the AIDS epidemic, as well as the many young people who sadly passed away due to COVID-19. Both of these health shocks reduced South African’s life expectancy, and it is millennials who witnessed and experienced it first hand, losing friends and loved ones and making them aware of the importance of life insurance for millennials.
Life insurance has evolved to meet millennials’ needs
Life insurance provides financial peace of mind. Millennials have seen how a payout from a policy changes the life of a family when an income earner passes, and how there is a financial struggle when an income earner dies and has no life insurance.
Although more appreciative of life insurance, millennials are not abandoning their need for simpler, more affordable and flexible financial products!
Life insurance has evolved to cater for the millennial market. Traditional life insurance products tended to have high admin costs and were inflexible and difficult to understand. Insurers have redesigned life insurance products over the last 30 years to remove some of the complexity, and make them easier to understand, buy and manage. Insurers have also actively looked for ways to make the claims procedure more efficient and effective, to dispel any doubts millennials had about getting claims paid.
Insurers have also simplified the life cover application process making it quicker and easier. Millennials may have witnessed their parents applying for life insurance, filling in several pages of paper forms, and then going for medical exams. Now, they can apply for cover online or over the phone. The same process applies to claims. Insurers are making use of automation to make these processes faster and more efficient. The result is that applications can be done in minutes, policies managed online, and claims paid in minutes, all in a safe and secure online environment.
1Life Insurance has stepped up to meet the needs of millennials with convenient, straightforward life cover tailored for every life stage and every family, from single parents to extended families. It takes minutes to get a quote and buy life cover online with savings of up to 13% that that deliver on our promise to offer affordable cover for all South Africans.
Affordability matters
Millennials value affordability and value in their life insurance. They want cover, but cover that they can afford, with any additional benefits welcome. Interestingly, although this is a generation not excessively loyal to products and brands, they are also the generation that enjoys loyalty programmes! Give millennials extra benefits and rewards and they appreciate the added value products offer. An example of this is extra benefits with life insurance such as will drafting services or free financial education courses.
Life insurance empowers millennials
Millennials want their life insurance pay-outs to benefit loved ones and future generations so they can build their wealth and avoid financial shocks. For most, life insurance offers certainty, and a way to care financially for future generations dependent on them.
We answer your questions about our products and services!
Why life insurance is important for millennials?
Life insurance is important for millenials as it provides them with a strong financial foundation, as the sandwich generation it is important to ensure that the right cover is in place to provide financial support for all that depend on them, should something happen to them. Millenials are also the generation that will be covering their parents for funeral cover, ensuring a respectable send off.
How to attract millennials to the insurance industry?
To attract millenials to the insurance industry, an insurer needs to be provide easy to understand processes, affordable premiums, and flexibility in how they interact with the insurer. As millenials are the first generation that have grown up with the internet, they have a vast network of information at their fingertips and are accustomed to researching and finding a company that suits their needs.
Do millennials buy life insurance?
Yes, millenials buy life insurance. They have a higher propensity to take out insurance directly and buy insurance online. 1Life insurance offers the opportunity to buy online (link buy online) with up to 13% savings on life cover and 40% on funeral cover premiums.
What is the most common age to buy life insurance?
Life insurance is most often bought later in life when people get married or start a family, but it is an important cornerstone to building generational wealth and should be insurance that you take out in your 20's when it is most affordable. If you have anyone that relies on you financially post 18 years old, you should strongly consider getting life insurance. (link life insurance to buy, not sure if we have a blog re cover for different ages/life stages and what to consider, but if we do, can we link to that as well)