How do we encourage millennials to see the benefits of protection planning?

Story

There is very little interest amongst millennials when it comes to taking out protection policies. How can we engage with this demographic to highlight the benefits that come with having life cover?

Taking out a protection policy tends to be fairly low down on the list of priorities for millennials. Often this is down to lack of awareness of the benefits available, but also misconceptions of how the policies work. Here we address these issues in a bid to help us educate others on the importance of having protection in place.

The key issue many young people have with protection planning is they fear the monthly premiums will be unaffordable to them. In fact, the best time to set up a policy is whilst you’re still young. Young people are usually in good health which means that monthly premiums tend to be low at this point. For example, a life and critical illness comparison quote for a 20-year-old non-smoker with a term to age 70 and a sum assured of £100,000, brought up monthly premiums of just over £20 per month. The same quote for a 40-year-old showed monthly premiums to be around £42.

For many youngsters, it’s difficult to see the need in having a protection plan as they are unable to see any obvious benefits during the here and now. It can seem pretty irrelevant to begin preparations for potential serious illnesses and death at the mere age of 22. This can then lead to feeling as though the monthly premiums would simply be ‘empty’ payments. In light of this, companies are now beginning to introduce perks as an incentive for millennials to take out life cover, such as discounts on gym memberships. This is a useful tool in not only engaging with young people as they are able to see a tangible benefit, but also encourages them to lead a healthier lifestyle - an advantage not only to the policyholder, but also the insurer.

Finally, perhaps the most significant aspect preventing youngsters from considering protecting their future and loved ones is that many simply don’t know what it is, or how it works. They are unaware as to how these products can positively impact their life. It’s, therefore, important that we are able to encourage millennials to see how protection can relate to their life goals. For example, those who are looking to become self-employed could potentially benefit from a term assurance plan as they are unable to rely on death in service cover which is typically provided by employers. Young backpackers could also benefit from insurance as this can cover medical costs whilst travelling abroad. It’s vital that we are able to highlight that protection is essentially a means for supporting us and our loved ones during and beyond our lifetime.

It’s crucial for us to have these conversations with the young people in our lives so that they are able to place this information within the context of significant life choices. Find out more about protection options here, or download our useful protection planning guide.

Latest news

Find all the latest industry news, all written by our in-house industry experts.

What makes a good financial adviser?

What makes a good financial adviser?

Story 19/11/18

The most recent Financial Lives survey conducted by the FCA revealed that only 40% of people trust financial advisers. With clients appearing to be dissatisfied with the level of service they're receiving, we look at the most important qualities a financial adviser should possess.

Read article
Monthly economic commentary: November 2018

Monthly economic commentary: November 2018

Commentary 16/11/18

Our chief economist, Colin Warren, explores how an increase in US government bond yields is giving way to market volatility and increased investor nervousness, in his latest economic commentary.

Read article
Why is good pension advice so hard to find?

Why is good pension advice so hard to find?

Story 08/11/18

A recent pensions study conducted by YouGov revealed that 45% of people find good pension advice hard to access. We look at the reasons for this and what can be done to help.

Read article
More articles

Get in touch

To discover how AFH's unique approach to wealth management can help you build a better future, please contact us.