Confused millennials are foregoing life insurance, shows new LIMRA study

Data reveals that 41% of millennials think they do not qualify for life insurance coverage

Confused millennials are foregoing life insurance, shows new LIMRA study
New research from LIMRA shows that many millennials are largely in the dark regarding life insurance and how to purchase it. The study revealed that 41% of millennials thought they did not qualify for life insurance, which in turn meant they did not even consider buying coverage.

According to James Scanlon, senior research director, Insurance Research – Markets at LIMRA, it’s an information gap the industry needs to address.

“It’s a huge barrier to actually getting coverage, taking yourself out of the running before you even try,” he says. “This research shows that financial literacy is not always present in young adults as it is with older adults.”

In Scanlon’s opinion, life insurance providers need to find a better means of communicating with millennials. While the majority of life insurance sales are with younger boomers and those in generation x, the industry needs to be thinking long term on this issue.

“It shows a lack of awareness and a lower level of financial sophistication,” he says. “So we are trying to communicate to the industry and to consumers to encourage people to educate themselves. Don’t just assume that you can’t get life insurance because you don’t qualify.”

Part of the problem is the fact that that the number of insurance brokers has decreased dramatically for decades now. In LIMRA’s most recent study into this trend, it was determined that in 1983 the number of career agents peaked at around 18,000; by 2012 there were less than 10,000. Not surprisingly, the number of policy sales also declined markedly during this period.

“There are fewer life insurance agents in the field, so that has cut down the number of door knocks or phone calls people receive,” says Scanlon. “The younger generation tend to be those that don’t get as much attention because many of them don’t have the income or assets that is typically associated with life insurance. So they may not receive proactive contacts from agents or financial professionals. Of course it is in those conversations that you become educated very quickly.”

Education is key to addressing this problem, and will be a key point discussed during The 2017 Life Insurance Conference held next month in Orlando, Florida. The event is sponsored by LIMRA, LOMA, the Society of Actuaries and ACLI, and will host industry professionals from companies across the globe, discussing the future of the industry.

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