In the popular trend of naming the generational groups, Generation Y or the “millenials” are those people who are now in their mid- to early 30s. Unlike the Baby Boomers who came before them, this generation is made up of pampered, high performers. Even though their parents and grandparents fueled the social unrest of the 1960s, they also embraced the post-World War II work ethic. Look for the old hippies today, and you’ll find them in board rooms and executive suites across the nation.
The Gen Y crowd, however, is more casual, less driven, and yet high performing in their flip flops with iPod earbuds dangling around their necks. Not surprisingly, they also have a markedly different approach to their own insurance needs — and one that is dangerously deficient.
Generation Y Insurance Research
The Guardian Life Insurance Company, an industry leader in providing employee benefits and one of the largest life insurers in the United States conducted a research study on Generation Y insurance customers. They found that:
- 96 percent of customers in that age bracket were “highly confident” in their benefit decisions,
- and yet, the Millenials are, at the same time, likely the most underinsured age group in America.
Only about 78 percent of currently employed Millenials are enrolled in their company’s benefit programs, compared to 92 percent of their older co-workers.
Communications Gap Fuels Problems
Although this is the same age group that universally demands online tools to manage all aspects of their lives, the vast majority of workers — regardless of their age — only try to understand their benefits by reading their policies. The availability of online insurance tools has increased 62 percent over the past five years yet, only
- 29 percent of customers have communicated with a benefits advisor via any channel,
- 28 percent have actually used the online tools they’ve demanded, and
- 14 percent have actually talked to a person at the insurer before enrolling in any aspect of coverage.
The results is that most people with benefits have absolutely no idea what those benefits are, and thus do not take full advantage of the coverage for which they pay. Which contributes to why so many wind up dropping that coverage, seeing it as a needless expense.
Recession and Indebtedness Factors into the Equation
To some extent, the fault of this apparent disinterest and lack of attention lies in the perception Generation Y holds about insurance. Whereas previous generations saw the expense of coverage as a hedge against future disaster, Generation Y sees premium payments as taking away money they could be using to meet other goals or to live a higher quality life.
This is also a generation seriously burdened with student loan debt, which tops out in the range of $898 billion to $1 trillion. Some 1.6 million people struggle under this burden, a significant number of them being Millenials. To them, cutting expenses like insurance makes sense in order to make their loan payments and to have any freedom in their lives at all.
Unfortunately, at the same time, medical debt is responsible for more than half of all bankruptcies filed in the United States. No health insurance? Your finances can be utterly destroyed by one catastrophic illness. Without question, insurance is a harder sell to the Generation Y customer. They believe they are informed and on top of the issue. In reality they are under-insured, badly out of the communications loop, and living one step away from potential financial ruin.