Life Insurance Opportunities for Millennials
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The consumer market in India is currently driven by the millennial population. They are the biggest population group with higher disposable income levels and strong digital technology exposure. They are not only more conscious of their needs, but also have the potential to drive customer behavior by being linked digitally. Therefore, the demand to evolve and match the requirements for this demographic group has become very intense for all markets.
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Life Insurance Opportunities for Millennials
When you are young, hale, and healthy, the perfect time to purchase life insurance is when you can pay the most affordable rates on life insurance policies. The plans most suitable for and popular amongst this generation are:
1. Term Life Insurance Policy
Term insurance is a life insurance policy that offers the beneficiary/nominee of the policy with financial protection if the policyholder/insured dies during the active policy term. This basic insurance requirement continues to hold good for this generation since the need for financial security through risk cover is very strong as they are presently the main breadwinners with higher disposable incomes.
2. Annuity/Pension Plans
Annuity is an income-paying insurance policy that can be used as part of pension/retirement planning. An annuity is a plan where after making a lump sum investment, the policyholder gets a periodic payment for life. The life insurance company invests the investor's money and pays back the returns generated from it. Because of the abundance of health services and awareness, this generation's life expectancy is high; combined with a higher living standard, the requirement for adequate pension/retirement planning has become more important for the millennial generation.
3. Unit Linked Insurance Plans (ULIPs)
ULIPs unlike a pure insurance policy, give investors both investment and insurance under a single integrated plan. This generation is more aware of equity investments and is thus well-placed to take full advantage of unit plans in which savings are invested in financial markets. These plans have the opportunity to generate high market-based returns, however, they come with potential risks.
4. Endowment Plans
It is a life insurance plan to pay a lump sum after a specific term ( on 'maturity') or on the death of the policyholder. Some plans also pay-out in the case of critical illness. While becoming less popular, as an alternative for a portion of savings with assured returns combined with tax benefits, there is still considerable acceptance for these policies.
Conclusion
These are simple insurance needs, on the face of it, which have already been present for previous generations; however, the distinction is in the way they are viewed and the service that this generation requires. The demand is very high for flexibility and customer-centricity. And to add to that, digital exposure necessitates most solutions to be available at the fingertip and with lightning speed. This has driven many insurers to invest extensively in technology solutions and has also led to the advent of new insurance technologies that provide tailor-made and simple solutions for this segment.
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