Generation Y: Ready to open its arms to life insurance

By Compuquotes Team on October 28th, 2010
Life Insurance

Generation "Y", that vast expanse of youth born between 1979 and 1994, is ready to open up its arms to life insurance--that is if life insurance companies can help Gen Yers get their arms around what the product is and how it works.

Prudential study says Generation Y is ready for life insurance

A recent Prudential study, titled Reaching Gen Y--Easier than You Think, offers an interesting sketch of the Generation Y world: responsible, open to the purchase of insurance and in need of education about life insurance products. Not only are Gen Yers open to buying life insurance, but they are likely to coverage within the next few years. In fact, of the 1,500 participants in a Prudential Internet-based survey, 48 percent plan to buy life insurance in the next three years and nearly 20 percent plan to buy life insurance policies within one year.

According to Prudential study data, Gen Yers have the financial guns to make life insurance purchases. The report quotes US Census Bureau figures from 2000, which estimates the group's collective annual income at $1.89 trillion and the size of the "Y" pool at over 70 million. Furthermore, a 2009 Deloitte report, cited within the Prudential study, estimates that Gen Y's earnings are expected to increase by 85 percent during the next decade to $3.5 trillion, exceeding baby boomers' earnings by $500 billion.

Life insurance education needed and wanted

But just because Gen Yers are expected to have the money to pay for life insurance, doesn't mean that they will spend it willingly. The Prudential study found that "when given prices of typical simplified issue term policies, 60 percent immediately became more interested in life insurance." The study finds that this generation wants to understand the differences in life insurance products and features, from term to permanent insurance, and how those features affect the price of coverage.

If Gen Yers are willing and able to buy life insurance, they may still need a lot of education to help them achieve that end. Term, permanent life insurance and how to actually make a life insurance purchase are still areas in which this group needs education, according to the Prudential study. For instance, 44 percent of those surveyed say they don't know where to turn for information and that "life insurance company websites and agents rank far below other sources of information for this group of consumers."

What they want, according to the study, "is education about life insurance, to better understand how life insurance fits into their lives, and to be provided with an easy way to purchase the product." Generation Y wants to be in control of the way they are educated on this topic and they are more interested in facts than gimmicky ads.

Why Generation Y should purchase life insurance

There are a number of reasons why Gen Yers should consider life insurance. "If you're single and have no children, then it's okay to not have insurance. But, the minute you marry and have kids, you must have life insurance," says Eve Kaplan, a certified financial planner and founder and CEO of Kaplan Financial Advisors, LLC, Berkeley Heights, N.J.

Another consideration, according to Kaplan, even for those relatively young members of Generation Y, is health status. Your health can change over time, so it may pay to lock into life insurance early because it will be more expensive as you grow older. Additionally, if you need insurance but are worried about the price of coverage, term life insurance can be a solution. For those considering term life insurance, Kaplan recommends getting a life insurance policy that has a longer term and a good company backing it.

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