Would you have guessed that life insurance sales are back on the rise? According to this report from Insurance News Net, sales are up pre-pandemic levels, and the biggest driver of those increases is the younger age group:
“The third quarter experienced the largest quarter-over-quarter gain since 2011 at 9.2%, MIB said, driven primarily by 12.8% growth in 0-44 age group and 9.2% growth in 45-59 age group.”
In September specifically, year-over-year life insurance application activity was up 7.2% for individuals in the 0-44 age group, while it was only up 4.6% for ages 45-59 and actually went down by 2.5% for those over 60 years old. This suggests that younger folks are more into insurance than they have been in the past.
What’s going on, you might be wondering? There are multiple factors at play, but one of the main reasons is that life insurance is a sound idea (even when you’re younger) and more Americans are starting to realize this fact. Here are some of the reasons why, even for younger, healthy people, life insurance just makes sense.
Why Would Young People Bother With Life Insurance?
Surveys and statistics still put the percentage of younger adults without life insurance over 65 percent, and most of those individuals are without insurance because they don’t think that they need it. They are young and healthy, after all, so why would buying insurance benefit them now as opposed to putting it off?
The answer is simple, and something that more and more younger folks are starting to pick up on. Just because they are young doesn’t mean they’ll never find themselves in a situation where life insurance would be useful. Suppose they were to expire — funeral costs (and even cremations) can run in excess of $5,000, which is more than most younger people have just laying around.
What’s more, life insurance payouts can help replace a lost income (for younger individuals who have family members who depend on them), or take care of debts that have cosignators (like student loans, which a majority of younger people possess and share responsibility for with their parents).
These reasons are all sound ones for younger people to apply for life insurance policies, but there’s also one more factor that might be driving increased activity in the younger age group — affordability.
As a rule of thumb, purchasing life insurance when you’re younger results in lower premiums, making it less expensive. Combined with those other factors, this makes the decision to get life insurance clear for many people, and could well be spurring the uptick in applications that we’re seeing today.