Insurance agents everywhere are finding out that youth really is wasted on the young. Despite lower premiums and easy access to policies, millennials lack every type of insurance coverage compared to older generations.
The majority of young adults ages 18 to 29 do not have health insurance. According to a survey from Princeton Survey Research Associates International, commissioned by insuranceQuotes.com, just 24 percent of millennials have health insurance. That is the lowest insured rate among any age group in the United States. In contrast, only 12 percent of adults over 30 lack health insurance. Millennials are also the least likely to have other types of insurance, such as auto, renters or homeowners, life, and disability.
“A lot has been made of the so-called ‘young invincibles’ who are choosing to forgo health insurance,” said Laura Adams, a senior analyst for insuranceQuotes.com. “This could be a costly mistake, especially because this group has easy access to health insurance. Young people typically pay much lower prices to obtain coverage via the health insurance exchanges and can receive subsidies depending on their income. Plus, they can stay on their parents’ health insurance policies until age 26.”
When millennials do purchase insurance, they are likely to select basic policies. The survey finds that 36 percent of young adults only have the minimum of any type of insurance required by low or a lender, compared to 23 percent among adults ages 30 to 49, and 21 percent among adults ages 50 to 64. However, 73 percent of millennials say their personal financial security is very important, on par with other generations.
Why are millennials underinsured? In addition to feeling invincible, young adults often find themselves struggling with student debt and a sluggish job market. Shopping for insurance tends to take a backseat to other bills. Millennials also appear to be overconfident in their ability to handle a financial emergency. In fact, 19 percent say they are very confident in how prepared they are for a financial disaster, only 3 percent below everyone else. Yet they are probably unaware that the median cost of a visit to the emergency room varies from $740 for an upper respiratory infection to $3,437 for a kidney stone.
InsuranceQuotes recommends that young adults research options by not assuming insurance is too expensive. The average renters insurance policy costs $10 to $30 per month, while life insurance plans are available to healthy nonsmokers for as little as $12 per month. Young adults should also reconsider opting for bare minimum coverage, especially in regards to automobiles. Instead, comparison shop and consider pay-as-you-drive insurance programs which provide a discount for good driving.
Follow Eric on Twitter @Mr_Eric_WSCS