Joseph Shonkwiler, the proud father of newborn twin boys, owns a life insurance policy.
Like many millennials, the policy was not a priority for the 34-year-old from Cambridge, Mass., until the twins were due. He will start paying down close to $200,000 in student debt after completing his MBA from the Massachusetts Institute of Technology's Sloan School of Management.
A study from Life Happens, a consumer group formed by insurance providers, and Limra, the life insurance trade association, found that 29 percent of millennials cited saving for a vacation as a priority over purchasing life insurance or increasing their coverage.
And 60 percent of millennials said it was more important to pay for expenses like Internet access, cable, and cellphones than purchase some or more life insurance.
"Young people think life insurance is something you need to think about when you get old," said certified financial planner Shannah Compton Game. "It's a conversation topic for their parents, not them."
But young people need life insurance policies too, especially if they have children or do not have coverage through an employer. Even a workplace plan, which typically covers $50,000 in income replacement, may not be enough for a young person with a mortgage or heavy private student loan debt which they could pass to spouses or parents who co-signed for loans. Workplace insurance plans do not transition with you, so millennials who change jobs a lot may come in and out of coverage throughout their careers.
"The main reasons a young person needs life insurance are if they are married or have a family. Life insurance provides income replacement that can be valuable for young people who are just starting out, or in the situation where one spouse makes more than the other," said Compton Game.
Reaching Out
The insurance industry is seeking new ways to appeal to younger buyers who are not offered a life insurance policy through work, or need extended coverage beyond a workplace plan because of risk factors.
Focus on benefits rather than telling stories about death, said Compton Game.