Life insurance, a crucial yet often misunderstood aspect of financial planning, holds significant importance for core-working-age Americans, particularly millennials. According to a recent survey by Insuranks, 82% of millennials acknowledge the importance of life insurance, with 48% expressing a desire to have it. Despite this recognition, 52% of respondents currently lack coverage, revealing a noteworthy gap in financial preparedness.
The survey identified two primary obstacles hindering millennials from securing life insurance: cost and confusion. A substantial 66% of participants cited high premiums as a deterrent, with 54% specifying that the costs of other insurances made it challenging to afford a life policy. Additionally, 59% reported feeling overwhelmed by the intricacies of the life insurance process.
The research brought to light that financial struggles would ensue for many respondents within a short period after the passing of a significant other. While half anticipated financial difficulties within six months, one in six expressed concerns about struggling within just one month.
A regret expressed by 30% of respondents was not obtaining life insurance at a younger age, with the average age of policy initiation being 27, and 19% securing coverage before the age of 21.
Life insurance decisions often coincide with significant life milestones, with 33% obtaining coverage when they started their first job, 27% upon starting a family, and 14% when getting married. Beyond the protective aspect for loved ones, life insurance policies offer additional benefits for older Americans, including opportunities to mitigate inflation through life settlements.
For those who do have life insurance, the study found that a quarter acquired coverage through their employer, attracted by the appeal of free or low-cost policies. The average monthly premiums for workplace policies were $29, while those for policies outside of work averaged $56.
In addition to cost considerations, millennials prioritize flexibility in their life insurance policies. When selecting an insurer, factors such as brand reputation, customer reviews, and deductible options play a crucial role in their decision-making process. Despite the existing barriers, the survey underscores the inherent value millennials place on life insurance and the need for solutions that address cost concerns and simplify the insurance process.