Life Insurance Industry Still Struggling to Engage With Millennials

September is Life Insurance Awareness Month  (opens in a new tab), and as it draws to a close, an inability to attract millennials remains one of the industry’s biggest challenges.

Less than 20 percent of Americans between the ages of 18 and 34 say they are “likely” to buy life insurance, according to trade group LIMRA  (opens in a new tab). And that’s just one of many recent studies showing how few millennials are opting for life insurance, compared with older generations. A Life Ant survey in 2014, for example, found that only 21 percent of those ages 23 to 35 had a policy. And a Gallup poll from earlier this year  (opens in a new tab) revealed that millennials are the least likely generation to be engaged with their primary life insurance carrier.

This apathetic attitude persists despite the benefits that purchasing a policy early in life can bring.

“When millennials buy life insurance in their 20s, with no kids, their 20-year rate will be locked in based on their health at the time when they purchase the policy,” John Bucsek, MetLife Premier Client Group managing partner, told The Street  (opens in a new tab). “So when they’re 45 years old, their rate will still be based on their better health at age 25—resulting in huge cost-savings over many years, when they will need it the most.”

Searching for a Solution

As with all things, millennials turn to online resources when it comes to life insurance; they are more than twice as likely to obtain it online as other age groups, according to Gallup  (opens in a new tab).

“For insurance company leaders, this means improving interactions with customers online is a smart investment toward building strong relationships with this future mainstream customer base,” Daniela Yi and Chris Portera wrote for Gallup  (opens in a new tab).

Other groups, like BNY Mellon, have suggested alternative means of appealing to younger audiences.

“Our research suggests that a new generation of pension products is needed, operating in conjunction with these existing methods, that can enable millennials to connect the present to the future,” the financial institution advised in a 2014 report  (opens in a new tab). “Millennials might respond better to a lifetime savings pot structure that offers some form of limited withdrawals or early access to part of the fund.”

And as the industry tries to find a way to scramble over the millennial hurdle, it’s no surprise that appealing to twentysomethings and improving customers’ buying experiences were primary topics during the 2015 Life Insurance Conference  (opens in a new tab) and are likely to return to similar prominence during next year’s conference  (opens in a new tab).

(zimmytws/ThinkStock)