By Matt Kaas, Life Marketing Consultant
Millennials, those individuals aged 18 to 34, are often characterized as the “Peter Pan” generation, refusing to grow up. And while I do not necessarily agree with this representation (probably because I myself am a millennial), it is indisputable that more and more millennials are dependent on their parents for financial support. According to a Pew Research survey, 36% of millennials still live with their parents or grandparents. And while you might think parents would simply push their children out of the house, a surprising number, approximately 27%, of middle-aged parents are willing to be the primary source of financial support for their adult children.
And while a case can be made that millennials have come of age in a time that has experienced two significant bear markets, the largest economic recession since the 1930s, and for the most part unimpressive market returns, more than half of adults ages 23 to 26 who are at least one year out of college still do not have full-time jobs. Whether or not this “failure to launch” effect is a result of the economic conditions, it is without a doubt causing millennials to be more concerned with today’s financial responsibilities and less concerned with their financial future than the generations before them.
One area where this is very evident is in life insurance. According to a study performed by Life Happens and LIMRA, 29% of millennials cited saving for a vacation as more of a priority than purchasing a life insurance policy. And a staggering 60% of millennials said it was more important for them to pay for expenses such as internet, cable television, and their cell phone than it was to purchase a life insurance policy. As a result, only 34% of millennials own individual life insurance, and only 39% indicated they would look to purchase life insurance in the next 12 months, according to LIMRA.
But millennials need life insurance! Those between the ages of 18 and 34 are largely the individuals that are getting married, buying homes, and having children for the first time. These significant life events are the reason millennials need life insurance. Today, those graduating from college will have four different jobs by the time they reach age 32, compared to only two jobs for Generation Xers, according to a study performed by LinkedIn. What this means is that group life insurance benefits offered by an employer may not only be inadequate but do not move from job to job and can leave someone uninsured during a job transition. This is just another reason millennials should purchase individual life insurance policies.
It’s pretty clear that millennials have the need for life insurance, yet there is still a significant gap in coverage. So what is it going to take to convince millennials to purchase more life insurance? Millennials grew up in a culture of customization. This generation was not simply given a teddy bear for their birthday, they were taken to a Build-a-Bear Workshop and were able to build their own one-of-a-kind teddy bear. Customize everything! Focus on the customization of benefits and features such as chronic illness benefits, return of premium, and waiver of premium benefits.
Millennials are technology natives – they turn to the internet for everything. Millennials have little interest in sitting down across the table from a financial professional, filling out a paper application, and waiting for a month to get their life insurance. According to a survey conducted by life insurance analyst Life Ant, 68% of individuals between the age 18 and 39 would prefer to purchase life insurance online and only 30% would opt for the more traditional method of purchasing life insurance coverage from a financial professional. Marketing campaigns and prospect communications targeting millennials should emphasize internet use, effective search keywords, pay-per-click advertisements, and social media.
Most importantly, millennials are part of a larger consumer group (80%) that misjudge the cost of purchasing a life insurance policy. According to a study by Life Happens and LIMRA, millennials overestimate the premium for a term insurance policy by as much 213%! The study found that millennials believed that a healthy 30-year-old male would have to pay up to $600 a year for a 20-year $250,000 face amount policy, when in fact the annual premium would be as low as $160.
For more information on millennials and life insurance coverage caps, or for helpful tips on how to market to the millennial demographic, please give me a call at 800.321.3924 x133.
Matt Kaas | Life Marketing Consultant
Ann Arbor Annuity Exchange
Ph: 800.321.3924 x133 | Dir: 734.786.6133
Prior to engaging in any social media, marketing programs, or seminars, producers should follow the approval requirements of their state(s), the carriers they represent and their broker/dealer and registered investment adviser, where needed, to ensure compliance with applicable regulations.
 Parker, Kim, and Eileen Patten. “The Sandwich Generation” Pew Research Center. 30 Jan 2013. Web. Accessed on 13 Feb 2017 at http://www.pewsocialtrends.org/2013/01/30/the-sandwich-generation/
 Serido, Joyce, Ph. D. and Soyeon Shim, Ph. D. “Life After College: Drivers for Young Adult Success” University of Arizona. Jun 2014. Web. Accessed on 13 Feb 2017 at http://aplus.arizona.edu/wave-3-report.pdf. p8
 “2015 Insurance Barometer Study Finds Americans Continue to Overestimate Cost of Life Insurance” Life Happens and LIMRA. 14 Apr 2015. Web. Accessed on 13 Feb 2017 at http://www.lifehappens.org/press-releases/2015-insurance-barometer-study-finds-americans-continue-to-overestimate-cost-of-life-insurance/
 “Majority of Younger American Adults Would Suffer Substantial Financial Consequences If Income Were Interrupted” LIMRA. 23 Jun 2014. Web. Accessed on 13 Feb 2017 at http://www.limra.com/Posts/PR/News_Releases/Majority_of_Younger_American_Adults_Would_Suffer_Substantial_Financial_Consequences_If_Income_Were_Interrupted.aspx
 Berger, Guy. “Will This Year’s College Grads Job-Hop More Than Previous Grads?” LinkedIn. 12 Apr 2016. Web. Accessed on 13 Feb 2017 at https://blog.linkedin.com/2016/04/12/will-this-year_s-college-grads-job-hop-more-than-previous-grads
 Rockford, Thomas. “Millennials Will Change How Life Insurance Is Bought” Life Ant. 25 May 2016. Web. Accessed on 13 Feb 2017 at http://www.lifeant.com/millennials-will-change-life-insurance-bought/
 See note 3
 Durham, Ashley. “2015 Insurance Barometer Study” Life Happens and LIMRA. 2015. Web. Accessed on 13 Feb 2017 at http://www.limra.com/Research/Abstracts/2015/150414-01.aspx?research_id=10737435712.p21
Designed for Financial Professionals.