Its pretty common to see millennials spending most of their income on fine dining, latest gadgets, bespoke clothes and accessories. In fact, most of them are also bitten by the travel bug and end up vacationing more than once in a year.
While there’s nothing wrong with living life to the fullest, its always wise to live a little more responsibly. This includes securing one’s future financially. However, for millennials, their investment decisions are also highly driven by their attitude towards life. Reports suggest that, when it comes to opting for insurance, millennials prefer a company that help them mitigate risks rather than just calculating risks for premium evaluation.
Since millennials are expected to become the largest market in the coming times, insurance companies are all set to rewind their strategies to tap in maximum customers. Sharing his views on the same, Anand Prabhudesai, Co-Founder of Turtlemint feels that as an industry, insurance has a long way to go. In a conversation with Nirmala Konjengbam, Prabudesai provides an insight into millennials’ relation with life insurance.
The millennial, as well as post-millennial generation, tend to evaluate investment from a technological perspective. So, the ease of buying, maintaining, renewing and claiming an insurance policy is of utmost importance along with the return on investment.
Since millennials have a higher disposable income, they tend to be risk-takers with high ambitions and hence they look as insurance as a risk-management product. They compare insurance policies with their features and ease of buying, rather than focussing on a lower cost. So, millennials opt for term insurance policies as a protection tool and opt for ULIPs for their investment requirements.
Millennials are usually quite aware of financial planning and are very investment savvy. With advanced technology in the investment and insurance space, opting for a life insurance plan has become quite easy. Also, since millennials position life insurance as a risk-management tool, insurance is definitely an important product in their investment basket.
However, life insurance needs to be purchased with a futuristic view rather than focus on the present as it comes most handy if the insured/breadwinner experiences an unfortunate event like death within the policy tenure. Also, millennials usually have high aspirations, thus increasing their current liabilities through EMIs and loans. This is also another reason to protect the same through insurance. Thus, life insurance comes to the rescue of the dependents for their financial liabilities to pay off loans or children education.
With technology and the internet, most products are well researched before they are bought. This is especially true for products with a longer shelf life like insurance. Millennials are extremely tech-savvy and hence they research a lot before purchasing. They tend to read the information, reviews, blogs, etc. available online as well as go through the videos and compare the products themselves. There is a lot of information available online which influences the buying process of millennials.
The entire comfort of researching and online window shopping is quite predominant with millennials. However, according to BCG report, insurance still remains to be a compare-online-buy-offline product.
The entire endeavour of the insurance companies, web aggregators, online insurance portals, etc. is to provide a plethora of authentic information to the user without confusing him. Since millennials are more tech-savvy than their parents, it is easier to navigate them through the website/portal and help them with their investing decisions.
So, these online portals target to provide information to the millennials through video content, 2-minutes read articles, posts on various social media, news content, etc. where the most content is consumed by millennials in their day to day routine. It should be a product that they consider as a must-buy, instead of something they do-not-understand! Explaining insurance to the millennials need to be done their way, using their lingo and hashtags, emotional videos, etc. rather than only text information!
And that is what everyone - the insurers, web-aggregators, online insurance portals are trying.