Accomoding life insurance to Millenials
Millennials, Millennials, Millennials—we hear so much about them. They’re quite elusive, we’re told, content to live most of their waking hours in the social media world in the glow of their portable glass screens. But are they entirely disconnected from the real one?
Contrary to popular misconception, they are not. As it turns out, they are just as likely to look to advisors for information about financial products as older generations, according to LIMRA’s recent research. But convincing them of the merits of owning financial products remains challenging, and breaking into their Twitter and Instagram time is easier said than done.
One of the problems with getting younger people interested is that they often dismiss the idea of owning life insurance outright. In fact, they vastly overestimate the cost of a level-term policy. Millennials in the United States, defined by the Pew Research Center as those born after 1980, say it’s too expensive, and estimate the cost to be 213 percent its actual cost. Educating younger people about just how affordable life insurance can be would be a step in the right direction.
Millennials have plenty of other financial priorities as well. Because they spend so much time with various media, they say the associated expenses like Internet, TV cable and cell phone bills are preventing them from purchasing some or more life insurance, according to recent LIMRA research.
What about saving for retirement? Financial professionals would be wise to offer younger people advice here as well, since LIMRA Secure Retirement Institute research has found that only three in 10 Millennials know how much money they should be putting aside.
Despite the rise in online buying elsewhere, it has not taken hold in financial services. But that doesn’t mean some consumers wouldn’t want to buy life insurance online without talking to anybody. Companies stand to lose sales if they don’t make it possible for visitors to do it all online — fully educate themselves and complete the process. Younger consumers are more likely to want to do this, according to LIMRA. And the recent arrival of robo-advisors is a new opportunity for companies to provide Millennials with cost-effective financial advice — while respecting their autonomy. Iquantify's research has show that "Millennials are interested in using online solutions to plan their futures, with 76% saying they would consider utilizing a free ‘app’ or online tool to accomplish their goals".
Financial services companies should also think about tailoring their marketing more effectively to Millennials. After all, many Millennials say they feel financial products are not for them. Big data analytics programs are enabling companies to see with keen detail where their marketing would work best. In France, AXA launched Switch by axa, an exclusive website for the young generation offering them specific products and services.
Needless to say, the opportunity is enormous. Half of the world’s population is under 30, and Millennials stand to inherit trillions of dollars in investable assets in the coming years. If financial services companies can alter their approach, Millennials will find value in financial products, purchase them, and benefit from the resulting increased financial security and peace of mind.
