There are plenty of misconceptions when it comes to life insurance that can leave many consumers scratching their heads about when or how to purchase. The secret is life insurance is underrated as an incredibly versatile, easily customizable tool people at any age should consider.
The 2023 Insurance Barometer Study by LIMRA tells us “over two thirds (69%) of life insurance owners report that they feel financially secure compared to a statistically significant difference of 49% of non-owners." Whether you’re nearing retirement, reaching the pinnacle of your career, raising young kids, or gaining financial independence, what would it be worth to know your loved ones are protected? It might be more affordable than you think.
The economic landscape and consumer needs are constantly evolving, and the life insurance industry with it. Let’s look at each generation and the unique challenges and solutions each might consider.
GenZ
At this life stage, it may seem like there’s little need for life insurance. With your primary apprehensions being planning for disability related expenses or unpredictable job security, certain life insurance riders can support those concerns.
At this age, you are more likely to fall into a lower risk class and benefit from more affordable rates now, regardless of future health changes. Term insurance will be the most affordable and depending on the policy, may include a conversation option to permanent insurance as you progress in your career and are more financially secure. Alternatively, considering permanent life insurance while time is on your side to accumulate more cash value potential is a gift to your future self. Some policies offer riders that allow you to purchase more coverage at future dates without additional underwriting as your life evolves and your responsibilities to others increase.
Since Gen Z (and millennials) appreciate an easy buying experience, many carriers have invested in digital tools to make the process quick, accessible, and less intimidating.
Millennials
Overall, millennials have the highest level of financial concerns at this point in their lives, with everything that comes with balancing a career, home ownership and expanding families. Because of limited disposable income and higher rates of debt, you're hesitant to invest in life insurance since you feel young and healthy.
However, the pros of purchasing now are worth it. Because of your age, you’re likely to fall into a more favorable risk class which will remain throughout the life of your policy.
Life insurance providers also know you want to do your own research online but may still want to talk to someone during the process, and many of them, including Protective, have invested in resources that create a seamless buying process, giving you the shopping experience you want.
Gen X
At this point, your career is likely established enough to where you understand your coverage needs more clearly. You’re in the prime of your income-earning years and anxiety over daily finances has subsided, with your focus shifting towards retirement planning.
Even though your health may be changing, it may not impact the price of life insurance as much as you think.
Baby Boomers
If you are uninsured or under-insured, it’s not too late to purchase life insurance, even if you are nearing retirement. Consider your goals – removing the burden of burial or final expenses (including inheritance taxes), protecting your partner, transferring wealth to future generations or leaving a legacy to a charitable organization you’re passionate about.
Perhaps you have a policy through work but it’s not enough to cover your goals. A common misconception is that it will be too expensive due to your age or health but spend some time exploring online calculators and you might be surprised. Choosing a product such as preneed or final expense to cover burial costs and any outstanding debt are options and going through the process of full underwriting (labs and doctor records) can be an even more affordable option.
Life insurance providers have continued to evolve with their changing customer needs by reinventing products, riders, and a tailored buying experience, whether digital or in-person is preferred. While there are perceived barriers, no matter what your age or life stage, the benefits outweigh them. When it comes to financial security, it's never too early or late to protect the lives and livelihoods of those you love.
Kathryn Cox is senior vice president and president of the Protection division at Protective.
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