Millenials Delay End-Of-Life Planning As Economy Stunts Social-Financial Development

Young Adults Avoiding End-Of-Life Financial Planning
A greater proportion of today's young adults are avoiding the financial planning required of older age and the end of life, with many burdened by debt and financial uncertainty. Shutterstock

The concept of end-of-life financial planning seems absurd to so many millennials yet to make a down payment on life itself. Burdened with high student debt amidst a floundering jobs market, young Americans today are continuing to postpone traditional milestones marking passage to financial and psychological security, including the purchasing of life insurance.

Sales of individual life insurance policies in the United States have fallen 45 percent to 9.7 million in 2012 from a high of 17.7 million in 1983, says Bob Kerzner, chief executive officer of insurance trade group Limra.

“The industry needs to learn how to better communicate with that generation,” Kerzner told Bloomberg this month. “Frankly, it’s a lot easier to market an iPod or a consumer good on the Internet.”

For this generation, the costs of living may actually outweigh its benefits — at least in the financial realm. Only 18 percent of Americans between the ages of 18 to 29 carried life insurance, compared to 43 percent of members of the rapidly aging Baby Boomer generation. But to be fair, such coverage never made much sense to healthy young adults charged with supporting an insurance pool of older, sicker insured adults. Moreover, that option might have disappeared for many as a traditional job benefit awarded along with health insurance and a retirement plan.

Usman Ahmad told Bloomberg he might consider life insurance at some later, distant point in his existence — like his late thirties.

“I’m not planning on dying any time soon so it’s a waste of money,” the 30-year-old Toronto resident said. “When I get married and have kids, maybe then I’ll consider it.”

These same young adults prolonging late-stage adolescence are also postponing death planning, a trend compelling some insurers to push faster and further into foreign markets, looking for people willing to pay what it costs to die. Insurers such as U.S.-based MetLife Inc. and Canada’s Manulife Financial Corp. say they’re expanding into Asia and Latin America to push retirement planning. Aside from pursuing new markets, these insurers are also hiring younger agents to help sell recalcitrant young adults on the imperative to be prepared. ManuLife says a third of its sales force is now younger than 40, with marketing efforts directed at college students.

Still, selling life insurance to the 80 million American millennials born between 1980 and 2000 might remain a hard sell in the near future. Only 52 percent of Americans under age 30 carry employer-sponsored health insurance, says payroll processor ADP.

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