Fountain of Youth

“Get ’em while they’re young” is a familiar refrain for marketers. The underlying rationale is that securing brand loyalty at an early age ensures it will continue for a lifetime.

But when it comes to life insurance, the prevailing opinion has long been that young adults are not prime candidates for coverage. As the theory goes, they have few financial responsibilities and are not yet supporting families that need the security life insurance benefits help provide.

For insurance professionals, it’s time to take another look at the youth market and its need for life insurance. Times have changed—and the lifestyles of young, working Americans have changed with them.

Previous generations of new high school and college graduates found jobs and quickly moved out of their parents’ homes into apartments or houses of their own. But life is different now: Young people are not only having a more difficult time finding jobs, but also staying under their parents’ roofs longer. In fact, an analysis of U.S. Census Bureau data by the Pew Research Center shows that one in five adults between the ages 25 and 34 lives in a multigenerational household–and the median share of household income contributed by those individuals is almost 25%. Just imagine the financial blow to loved ones left behind if 25% of the family income were lost.

Savvy insurance advisers should also consider that reasons abound for young adults to enroll in employer-paid life insurance or supplement that coverage with a voluntary plan. Benefits can be used to:

• Pay funeral and other burial expenses
• Pay off creditors
• Cover federal and state estate taxes if they’re fortunate enough to have high-value savings or investments
• Help siblings pay for college, provide parents with funds for retirement or finance a loved one’s personal dreams
• Fund a scholarship or charitable program

• They’re living at home and contributing to family expenses.
• They’re newly married or planning a wedding.
• They’re having a baby. —T.G.