Millennials Least Likely To Have Insurance
They’re saddled with debt, underemployed and think they’ll live forever. At least, those are the stereotypes about Generation Y, also known as the millennials.
A new insuranceQuotes.com report shows that the millennials are not only lacking in financial assets, they also are lacking insurance.
Approximately one in four Americans between the ages of 18 and 19 lacks health insurance. This age group is 10 percentage points more likely to be without health insurance than those aged 30 and older.
Part of the reason these “young invincibles” could be choosing to go without coverage is that they may believe it is less expensive to pay a fine for not having coverage than it is to pay for health insurance. In addition, young adults can remain on their parents’ health insurance policies until age 26.
But it’s not only health insurance that the under-30s are foregoing. The insuranceQuotes.com report showed that 18–29 year-olds are less likely than all other age groups to have health, auto, life, homeowner’s, renter’s and disability insurance. While some of this can be attributed to living with their parents or having fewer assets to protect, there is ample evidence that millennials are unprepared for potential financial risks, the report said.
For example, only 12 percent of under-30s reported having renter’s insurance. Sixty-four percent reported having no life insurance. More than one-third (36 percent) said they have no auto insurance, which might be attributed to the fact that the number of young adult drivers has dropped in recent years.
This lack of insurance may be prompted by the millennials’ having lower rates of home ownership and lower incomes than other age groups. But other factors may be at play as well. The term “young invincible” is an apt description of this age group. Most under-30s are healthy and believe they will remain that way indefinitely. Or as Kile Lewis, co-founder of oXYGen Financial, a financial planning firm in Atlanta that caters to customers from generations X and Y, told insuranceQuotes.com, “Like anyone who’s young, they’re 10-foot-tall and bulletproof.”
In addition, Gen Y grew up with overprotective parents and that decreased their level of fear. And fear give people the incentive to buy insurance. That’s the word from Kit Yarrow, a financial psychologist at Golden Gate University in San Francisco.
When millennials do buy insurance, they’re likely to get a bare-bones policy. In the survey, 36 percent of under-30 adults said they have only the minimum of any type of insurance required by law or a lender. In contrast, only 23 percent of adults ages 30 to 49 and 21 percent of those 50 to 64 said the same.
Given their underinsurance, Gen Y consumers appear to be overconfident in their ability to handle a life crisis.
In fact, 60 percent of millennials said they’re either very or somewhat confident they’re prepared for the potential financial impact of a life event such as a car accident, having belongings stolen, getting hit with substantial medical bills or becoming disabled. In fact, Gen Yers had the most confidence of any group except for those 65 and older (68 percent).
Each generation has its own way of doing business and Gen Y will put its own stamp on the marketplace. The challenge for those who want to turn these uninsured millennials into clients is to convince them that they are not as invincible as they think they are.