Life insurance has long been viewed as a product for older generations. However, trends show that more and more millennials are recognising the value of getting insured early and are purchasing term life insurance policies.
In this blog post, we’ll explore the shifting perceptions around life insurance and what’s driving this new demand from millennials. We’ll also look at the key benefits of term insurance, making it an attractive option for young people.
Changing Attitudes Towards Life Insurance
Historically, life insurance was associated with family breadwinners nearing retirement. The idea was that if the primary income earner died unexpectedly, the payout from a life insurance policy would support their family.
However, millennials have a different perspective. They recognise that death can happen unexpectedly at any age. Term life insurance allows them to protect their loved ones financially during their working years when debts are high and savings are low. Surveys show that millennials are much more likely to consider purchasing life insurance than past generations were at the same age. Key reasons for this shift include:
Financial obligations: With more student loans, mortgages, etc., millennials want to ensure their loved ones aren’t burdened.
Young families: Becoming new parents drives millennials to consider life insurance earlier.
Peace of mind: Millennials see life insurance as a way to reduce worry and gain financial security.
Key Advantages Driving Demand for Term Life Policies
So, what is explicitly leading more millennials to choose term life insurance? Some of the main advantages include the following:
● Affordability
Term life insurance offers the most coverage for the lowest cost, making it the most budget-friendly option for millennials. Premiums are significantly lower compared to whole or universal life insurance.
● Flexibility
With term insurance, millennials can customise the policy length to meet their budget and needs. Common term lengths are 10, 15, 20 or 30 years. Millennials can match their coverage to essential milestones like paying off a home mortgage or covering child-rearing expenses.
● Simplicity
Term life insurance provides straightforward financial protection, with a set payout to beneficiaries if the policyholder passes away during the term. By contrast, whole and universal life insurance are more complex, with investments and many moving pieces. The simplicity of term insurance aligns well with millennials’ priorities.
● High Coverage Amounts
Today, more than ever, the high housing, childcare, and medical costs mean that young families need ample protection. Term policies enable millennials to get coverage to provide for loved ones adequately.
● Living Benefits
Some insurers now offer “living benefits” riders with term life insurance. These riders allow millennials to access benefits while still living if they are diagnosed with a terminal or chronic illness. This feature provides added value.
How Insurtech Is Boosting Access and Affordability
Insurance technology companies are making it easier for digitally savvy millennials to secure term life insurance. Top insurance firms like ACKO General Insurance are introducing the following innovations:
Streamlined online applications: Apply for coverage in minutes without medical exams.
Accelerated underwriting: Receive near-instant policy decisions thanks to algorithmic and database analyses.
Mobile accessibility: Manage your policy whenever and wherever, right from your smartphone.
Competitive pricing: Lower overhead costs translate to affordable monthly premiums.
Key Considerations When Purchasing Term Insurance
If you’re a millennial considering term life insurance, be sure to:
Get quotes from multiple top-rated insurers to compare rates. Insurtechs often beat out traditional insurance companies.
Calculate the ideal coverage amount based on debts, funeral costs and income replacement needs.
Select a term length that covers your most financially vulnerable years.
Understand exclusions that may deny a payout.
Consider adding a living benefits rider for access to funds if seriously ill.
Conclusion
Unlike past perceptions, life insurance is no longer just a product for retirees. With ample financial obligations and families to provide for, millennials recognise the value of securing term life insurance earlier in life. Attractive pricing and innovations by insurance companies make term policies accessible for today’s young adults. With insurers adding more tailored features that resonate with millennials, this demographic will likely see surging demand for term life insurance.
