A new LIMRA study found that six out of ten Generation X and Y Americans say losing their income for six months due to accident or illness would have a significant or drastic impact on their families’ financial well-being.
“Our study revealed that younger generations were more likely to feel the financial impact of income loss more severely than Baby Boomers,” said Nilfur Ahmed, senior research director, LIMRA Insurance Research in a press release.
Individuals who were born between the mid 1960’s and the early 1980’s are classified as Generation X, while individuals born between the late 1980’s and the year 2000 are classified as Generation Y or Millennials.
The study, “U.S. Consumers: The Generations,” examines the current financial situation of Baby Boomers, Generations X and Y, focusing on their financial concerns, goals, attitudes and behaviors.
Results were generated from more than 6,000 consumers aged 25 to 64 (with household incomes of 25,000 to 149,000 dollars) who served as the financial decision-makers of the household.
“The reaction was just as pronounced in the event of death of the primary wage-earner, where about six in ten Gen X and Y consumer thought their households would be negatively affected compared with just over one-third of Boomers,” said Ahmed.
Not surprisingly, life insurance ownership improves with each generation.
The study shows that only two-thirds of Gen Y consumers have any kind of life insurance compared with three-quarters of Gen X and Boomers.
In addition, fewer Gen Y consumers own individual life insurance (34 percent) than Gen X consumers (45 percent). More than half of Baby Boomers report owning individual life insurance (52 percent).
However, more Gen Y consumers said they were more likely to purchase within the next 12 months than both Gen X and Boomers.
LIMRA created a chart to help depict this information, which can be found here.
Nearly half of Gen X and Y consumers said they would prefer to buy life insurance through face-to-face meetings with a financial professional; one in four Gen Y consumers and more than one in five Gen X consumers said they would prefer to purchase through their workplace.
Researchers highlighted that Gen X and Y consumers felt the need for professional advice when purchasing life insurance, as it is a relatively large purchase. However, researchers also uncovered that more than seven in ten Gen X and Y consumers were interested in learning more about saving options and saving strategies for the future.
“Fewer than one in five Gen X and Y Americans have a defined benefit plan, meaning most will be solely responsible for funding their retirement, “ said Ahmed. “This study makes it clear that younger consumers recognize this and are interested in getting professional advice, which could help them with their top financial concern of saving for retirement.”
Keep in mind that life insurance premiums are currently at an industry all-time low, which makes getting a policy even easier. In addition, purchasing a policy when you are young and healthy will help you secure a lower premium rate for years to come.