COVID Boosts Life Insurance Purchases Among Millennials
September 21, 2021
September 21, 2021: Millennials aren’t often considered the prime demographic for life insurance, but one study suggests that COVID-19 may have changed that. As the pandemic forced the world to reckon with mortality, young people invested in life insurance policies and proved that this coverage is a wise investment for people of any age. This raises the question — are millennials changing the life insurance game? The increasing life insurance purchases during the pandemic certainly initiated some key changes for the insurance industry, including these four that might be indicative of even bigger changes to come.
Less Necessity for Medical Exams
One of the most significant ways that millennials have changed life insurance protocol is by minimizing the need for medical exams. In prior times, a medical exam was a prerequisite for obtaining a life insurance policy. Eventually, this was replaced by a self-reported health questionnaire for most insurers. Because most millennials are in good health, medical exams are becoming increasingly obsolete as a necessity before applying for a health insurance policy. This benefits applicants of all ages by making an insurance policy more accessible.
Lower Rates for Everybody
In addition to minimizing the need for medical exams, millennials have helped to lower average premiums for the general insured population. How? Because millennials are generally healthy, their rates are likely to be lower, and this helps to lower the average premium for all customers. As more people obtain insurance, the demand decreases, too, which can further drive down the price and make life insurance more accessible for everybody — including applicants who are not millennials.
More Autonomy in Choosing Policy
Millennials are all about options, and life insurance is no exception to this rule. It was previously standard for employers to provide their staff with life insurance as part of the benefits package. Though this practice has fallen out of favor, it’s given consumers more choice in finding the policy they want. This is especially true of millennials — many of whom don’t have any benefits at their jobs at all. Rather than be stuck with an undesirable policy from an employer, they are introducing a new level of autonomy to the life insurance marketplace.
High Likelihood of Policy Maintenance
One of the biggest threats to the life insurance industry is the continual cancellations from customers. People want to save money, and they certainly don’t anticipate that anything will happen to them, so they cancel policies and never come back. Millennials may be reducing cancelation rates, though, by sticking with the policies they buy. This is because insureds who obtain a policy earlier in life might be more inclined to maintain it, especially if their premiums are low and the coverage is good.
About 1891 Financial Life
At1891 Financial Life, we pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs.