Generation Y Takes Prudential Life Insurance to Task

Published: Wed 07 Jul 2010

Larry Roth

"You think you know, but you have no idea," sums up how the typical member of Generation Y regards the life insurance processing, according to research released today by the Prudential Individual Life Insurance unit of The Prudential Insurance Company of America, Prudential Financial's subsidiary company.

The study, entitled "Reaching Gen Y - easier than you think," showed that consumers born from 1979 and 1994 think that life insurers have not yet begun targeting them officially, and as a result, have taken to employing generic marketing tactics to push their products. Although 68 percent of the participants said they intended to purchase or add life insurance coverage in the coming three years, they are not interested in participating in the standard purchasing process. Members of Generation Y would like to have the power to buy, and eventually they want to see consumers like them who have life insurance and are better for it.

"Hearing these statements firsthand really turned our original thinking and approach on its head," commented Joan Cleveland, the senior VP of business development with Prudential Individual Life Insurance. "While it's clear that more research needs to be done, we know that our marketing messaging needs to meet Gen Yers where they are, and allow them to see themselves with life insurance."

The true obstacle for the life insurance industry is to augment the typical distribution channels and start to think on a larger scale about various access points to consumers. This is especially true for Generation Y because this demographic does not want to be cajoled into or automatically signed up for policies they don't understand. They would also like more information on life insurance products and, eventually, a simpler way to buy.

Online Buying vs. Agent Consultations

Although 53 percent of Gen-Y members that participated said they would consider buying life insurance online, they would still prefer to consult with an agent at some point during the buying process.

"Today, so much of our time is spent online so it's no surprise that the Internet is their first stop when they're looking for information about life insurance," explained Cleveland. "When people put Gen Y and the Internet in the same sentence, they automatically think social networking. But that is only one part of the equation, so we'll leave it up to them to drive the process and tell us where else we need to go."

Prudential's research also indicated that Generation Y understands the concept of life insurance but fails to grasp the complexities of underwriting, pricing, and product types, which leads to a number of misconceptions among the demographic. For instance, many Generation Y members believe life insurance is only a necessity for people who have high-risk occupations or are ill or elderly. Some study participants also regarded life insurance as a luxury product reserved for the well-off.

In spite of these perceptions, Generation Y is a market the life insurance industry cannot afford to overlook. "To align with the lifestyles and preferences of Gen Yers, we'll do a better job of demystifying the life insurance process. And, we'll look to relinquish some of the control and allow them to teach us about themselves so we can create relevant products and processes," Cleveland said.