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Why Life Insurance Policy Is A Mandate For Millennials

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Why Life Insurance Policy Is A Mandate For Millennials
Santosh Agarwal - 21 February 2020

Every industry and business has witnessed transformative disruptions over the years. They must adapt or perish the technological advancements that are changing the way customers and businesses interact. Insurance being one of the oldest industries in the market is no exception. The reason behind adopting the change is, the traditional model of selling insurance which is no longer appealing to the single largest force driving many of these disruptions – millennials. According to the researches India has one of the largest millennial populations in the world around 426 million, which is approximately 34 per cent of the total Indian population, they also form approximately 47 per cent of the total workforce. The fate of the insurance market lies in adapting and evolving to satisfy millennials’ requirements.

Millennials make up for a large financial product market across the globe. They are expected to soon become the largest market for the same. In India, insurance has been primarily sold push-driven and traditionally sold via an agent model. However, today’s millennial generation has been bought up in the era of the information age and digital technology. Their approach towards financial investment differ quite a lot as compared to their preceding generation, they tend to evaluate investment from a technological perspective. Therefore, being a financially literate generation, millennials are choosing online channels for their insurance purchase. Not just the buying mode, the purchasing preferences, financial goals, habits and professional journey of the millennial generation are different from the previous generations, all of which impact how insurance is being perceived among Gen Y.

Life insurance has been perceived as a better financial instrument among the millennials compared to others. They think life insurance as the most prominent way to fulfill their financial goals. Some of the most prominent attributes of life insurance that impresses the millennials are higher cover available at nominal premiums, buying assistance, simplified documentation, and excellent pre and post-sales customer service. Various reports mark life insurance as the most preferred financial instrument among millennials followed by MF’s and FD’s

Life insurance is a must-have product in the portfolio of millennials because of its risk management characteristics. Millennials have a higher disposable income, therefore they are higher risk-takers with high ambition and hence they look at insurance as a risk-management product. Considering the current situation and lifestyle it’s important for the younger generation to buy life insurance products with an eye on the future. Life insurance provides the best risk cover to the family against the financial liabilities of the breadwinner in case of sudden demise.

Benefits of buying Life Insurance at an early stage

Life insurance is a must-have product for everyone and anyone. Life insurance acts as a safety net that you and your family will need in the ups and downs in life. It covers you against the most terrible incidents of your life like severe illness, freaky accident, and even death, which derails your future plans. Growing up brings along a lot of responsibilities and safeguarding your loved ones is one of them. Therefore, it would be beneficial for you if you buy it at an early stage:

Lower Premiums: The most frequently asked question is what is the right age to buy a life cover. The answer is simple, the earlier you buy it, the better it is. Usually, the younger you are the healthier you are. As you grow older you are more prone to critical illness like cancer, as well as lifestyle diseases caused due to sedentary habits that accompany the nine to five work life. Therefore, you can get a life cover for yourself in the early years at a very nominal price, without any risk of an increase in premium down the line.

Riders: Apart from death benefits, life insurance also covers you against various incidents through different add-ons. However, the eligibility to buy the riders depends upon your health and age. It is easier to get those riders early in life in the pink of your health.

Family Protection: Protecting your family’s future does not require any age limit. The early you start doing it the better it would be. Life insurance will act as a financial safeguard for your family in case of your sudden death.

What kind of insurance policy is appropriate?

Despite being financially literate, buying a life insurance policy can be stressful and confusing. Therefore, it is necessary to learn how you can get a comprehensive cover according to your requirements. Life insurance offers you various options that provide you a comprehensive safety net for your savings along with a life cover, which includes term life, whole life, and ULIPs. Term insurance covers you for a specific period of time, typically for 30, 40 or 50 years. This plan provides monetary death benefits to the nominee in case of the untimely death of the policyholder during the policy tenure. The policy remains active throughout the chosen term. On the other hand whole life plan typically covers you for your entire life and similar to the term policy the death benefits will be provided to the nominee after the death of the policyholder. Unit linked insurance product provides you dual benefits, along with a life cover it allows you to invest in debt and equity funds according to your risk-taking capacity. One must also look for optimum plans to secure their child’s future. These are long term plans that are specifically designed for your child’s education. Therefore, millennials who have kids, need not worry about their future expenses. To choose the right type of life insurance one must have to be clear about the personal requirements and financial goals.

Millennials are considered tech-savvy and hence they research a lot before purchasing life insurance. They tend to read each and every information available to make the right purchase. However, the insurance providers are focusing more on the information they are providing as this information plays a major role in influencing the millennial’s decision to buy life insurance.

The author is the Chief Business Officer of Life Insurance, Policybazaar.com

very industry and business has witnessed transformative disruptions over the years. They must adapt or perish the technological advancements that are changing the way customers and businesses interact. Insurance being one of the oldest industries in the market is no exception. The reason behind adopting the change is, the traditional model of selling insurance which is no longer appealing to the single largest force driving many of these disruptions – millennials. According to the researches India has one of the largest millennial populations in the world around 426 million, which is approximately 34 per cent of the total Indian population, they also form approximately 47 per cent of the total workforce. The fate of the insurance market lies in adapting and evolving to satisfy millennials’ requirements.

Millennials make up for a large financial product market across the globe. They are expected to soon become the largest market for the same. In India, insurance has been primarily sold push-driven and traditionally sold via an agent model. However, today’s millennial generation has been bought up in the era of the information age and digital technology. Their approach towards financial investment differ quite a lot as compared to their preceding generation, they tend to evaluate investment from a technological perspective. Therefore, being a financially literate generation, millennials are choosing online channels for their insurance purchase. Not just the buying mode, the purchasing preferences, financial goals, habits and professional journey of the millennial generation are different from the previous generations, all of which impact how insurance is being perceived among Gen Y.

Life insurance has been perceived as a better financial instrument among the millennials compared to others. They think life insurance as the most prominent way to fulfill their financial goals. Some of the most prominent attributes of life insurance that impresses the millennials are higher cover available at nominal premiums, buying assistance, simplified documentation, and excellent pre and post-sales customer service. Various reports mark life insurance as the most preferred financial instrument among millennials followed by MF’s and FD’s

Life insurance is a must-have product in the portfolio of millennials because of its risk management characteristics. Millennials have a higher disposable income, therefore they are higher risk-takers with high ambition and hence they look at insurance as a risk-management product. Considering the current situation and lifestyle it’s important for the younger generation to buy life insurance products with an eye on the future. Life insurance provides the best risk cover to the family against the financial liabilities of the breadwinner in case of sudden demise.

Benefits of buying Life Insurance at an early stage

Life insurance is a must-have product for everyone and anyone. Life insurance acts as a safety net that you and your family will need in the ups and downs in life. It covers you against the most terrible incidents of your life like severe illness, freaky accident, and even death, which derails your future plans. Growing up brings along a lot of responsibilities and safeguarding your loved ones is one of them. Therefore, it would be beneficial for you if you buy it at an early stage:

Lower Premiums: The most frequently asked question is what is the right age to buy a life cover. The answer is simple, the earlier you buy it, the better it is. Usually, the younger you are the healthier you are. As you grow older you are more prone to critical illness like cancer, as well as lifestyle diseases caused due to sedentary habits that accompany the nine to five work life. Therefore, you can get a life cover for yourself in the early years at a very nominal price, without any risk of an increase in premium down the line.

- Riders: Apart from death benefits, life insurance also covers you against various incidents through different add-ons. However, the eligibility to buy the riders depends upon your health and age. It is easier to get those riders early in life in the pink of your health.

- Family Protection: Protecting your family’s future does not require any age limit. The early you start doing it the better it would be. Life insurance will act as a financial safeguard for your family in case of your sudden death.

What kind of insurance policy is appropriate?

Despite being financially literate, buying a life insurance policy can be stressful and confusing. Therefore, it is necessary to learn how you can get a comprehensive cover according to your requirements. Life insurance offers you various options that provide you a comprehensive safety net for your savings along with a life cover, which includes term life, whole life, and ULIPs. Term insurance covers you for a specific period of time, typically for 30, 40 or 50 years. This plan provides monetary death benefits to the nominee in case of the untimely death of the policyholder during the policy tenure. The policy remains active throughout the chosen term. On the other hand whole life plan typically covers you for your entire life and similar to the term policy the death benefits will be provided to the nominee after the death of the policyholder. Unit linked insurance product provides you dual benefits, along with a life cover it allows you to invest in debt and equity funds according to your risk-taking capacity. One must also look for optimum plans to secure their child’s future. These are long term plans that are specifically designed for your child’s education. Therefore, millennials who have kids, need not worry about their future expenses. To choose the right type of life insurance one must have to be clear about the personal requirements and financial goals.

Millennials are considered tech-savvy and hence they research a lot before purchasing life insurance. They tend to read each and every information available to make the right purchase. However, the insurance providers are focusing more on the information they are providing as this information plays a major role in influencing the millennial’s decision to buy life insurance.

The author is the Chief Business Officer of Life Insurance, Policybazaar.com

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