Research shows that debt and housing concerns the main financial focus for younger Canadians
Life insurance remains a tough sell for younger Canadians with a number of other financial concerns taking precedence. A new study by TD Insurance on millennials’ financial well-being shows that life products are far from a priority. In fact, the research showed that life insurance ranked bottom of the list of financial priorities for Generation Y. Over half (55%) of respondents said they don’t have any life insurance, with cost (55%) and not having dependents (37%) the main reasons for not having coverage.
Looking at the numbers, Mark Hardy, senior manager of Direct Life & Health at TD Insurance believes a knowledge gap has developed when it comes to these products, especially when it comes to cost.
“I think there is a misconception about the price where people just assume it is very expensive,” he says. “If you are talking about $500,000 worth of coverage for a male that’s aged 30, you would be talking in the range of $25 a month, and around $20 for a female.”
Another reason coverage rates are so low among millennials is the fact that people do not think about their own mortality a lot while still in their 20s. As they start to have families, priorities change, but the industry certainly has work to do to convince this demographic that life insurance is worth pursuing, explains Hardy.
“The thought among many millennials is that life insurance is only for funeral expenses,” he says. “Life insurance is there to support your beneficiaries, but it does more than just cover funeral expenses. It can provide income replacement, help to pay off any debt you may have accumulated. So if the worst was to happen, your family can continue to live the same kind of lifestyle.”
While life insurance ranked last on the list of financial priorities, it’s not surprising to see what occupied the top positions. Among those surveyed, 25% said paying down debt was most important, while saving for a house was next with 21%. The challenge life insurers now face is convincing younger Canadians that their products shouldn’t be ignored. It is true that many millennials are struggling to manage debt, but that shouldn’t be a reason to skip protection for your family, believes Hardy.
“So there is certainly an opportunity to bring awareness,” he says. “We hope that people will take some time to educate themselves about what life insurance is and how it works and make a decision consciously instead of just avoiding it.”
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Looking at the numbers, Mark Hardy, senior manager of Direct Life & Health at TD Insurance believes a knowledge gap has developed when it comes to these products, especially when it comes to cost.
“I think there is a misconception about the price where people just assume it is very expensive,” he says. “If you are talking about $500,000 worth of coverage for a male that’s aged 30, you would be talking in the range of $25 a month, and around $20 for a female.”
Another reason coverage rates are so low among millennials is the fact that people do not think about their own mortality a lot while still in their 20s. As they start to have families, priorities change, but the industry certainly has work to do to convince this demographic that life insurance is worth pursuing, explains Hardy.
“The thought among many millennials is that life insurance is only for funeral expenses,” he says. “Life insurance is there to support your beneficiaries, but it does more than just cover funeral expenses. It can provide income replacement, help to pay off any debt you may have accumulated. So if the worst was to happen, your family can continue to live the same kind of lifestyle.”
While life insurance ranked last on the list of financial priorities, it’s not surprising to see what occupied the top positions. Among those surveyed, 25% said paying down debt was most important, while saving for a house was next with 21%. The challenge life insurers now face is convincing younger Canadians that their products shouldn’t be ignored. It is true that many millennials are struggling to manage debt, but that shouldn’t be a reason to skip protection for your family, believes Hardy.
“So there is certainly an opportunity to bring awareness,” he says. “We hope that people will take some time to educate themselves about what life insurance is and how it works and make a decision consciously instead of just avoiding it.”
Related stories:
Don’t judge a book by its cover on generational divide
Working millennials seek more flexible benefit plans
