Priyanka, an architect aged 35 years and a single mother of one, began endurance training two years ago. She recently completed a 42 km marathon in 4.5 hours, a personal best and an achievement that has left an imprint on her social media. Ankur, aged 27 years, is an engineer with a leading technology firm and has had an extraordinary professional year. He is excited about the Ladakh trip he is taking in August. Taarika, aged 20 years, works as a digital marketing expert by day and designs her own line of clothes by night.
Priyanka, Ankur, and Taarika are ideal illustrations of how diverse the Generation Y is from their predecessors – the Generation X. They, however, have one thing in common —none of them have bought a life insurance policy. In order to understand, it is crucial to look at consumer behaviour of the millennials when compared to their predecessors.
While millennials dread ‘settling down,’ the earlier generation worked towards this goal— they spent judiciously. Generation Y, however, is the generation of ‘more.’ They are travellers and entrepreneurs; they view ‘settling down’ as a restriction. Luxury consumption is more commonplace now than it was before. So where does life insurance lie on the list of priorities for a generation that loves spending, and lives in the ‘now’?
Generation Y and Life insurance
It is clear that Generation Y focuses more on the short-term and immediate goals. They believe that they will not require life insurance until later in life. After all, who wants to think about death when you have just begun your life?
However, it is unthinkable that an individual like Priyanka, who has a kid depending on her, does not have a single life insurance product yet. Considering her financial responsibility will only grow as her kid grows older, a pure term policy and a child plan are extremely vital for her.
In the case of both Ankur and Taarika, the sheer virtue of health and lower financial burden provide a lucrative opportunity of getting a cost effective product. Young single adults like Ankur and Taarika should consider buying a pure term insurance plan or a ULIP in order to begin preparing for their future.
The Influence of Digital
A rising dependence and steady stream of digital interaction has led to new technology-based services. Millennials are turning to internet for research and are faced with an avalanche of information, which has consequently led to a shrinking attention span. Life Insurance sector is not exempt from the digital influence. In fact, digital life insurance buying will soon overtake traditional buying.
This generation wants a simpler buying process—they do not want to fill out paper work, have at-home visits or wait for long duration for a response. The millennials prefer a dialed-in website, communicating via text message.
With the advent of internet of things (IoT), artificial intelligence and social media, life insurance industry is undergoing a serious change. So, it won’t be the strongest businesses that can survive, but the ones that can best manage and withstand change.
Martijn De Jong
Chief Digital Officer, Aegon Life Insurance