If you think that the young executive who has just joined the corporate world is stereotypically blowing his or her newly acquired cash on trendy fashion accessories, fancy cars or the latest and greatest electronic gadgets, think again.
There is a new breed of financially savvy youngsters who are nowadays taking more responsibility for their overall well-being than ever before. There goes pigeonholing right?
According to research compiled by direct life insurance provider 1Lifedirect, 15% of its client base is made up of those in the 18 – 25 age group. The females in this age bracket are out-purchasing their male counterparts by 50% but overall, young adults are bucking the notion that life insurance is reserved for the more mature, established individual.
"It is also interesting to note that the majority of our life insurance policies are held by the 26 – 35 age group. Once again, women are purchasing 7% more policies than men which is a unique trend within itself as in the 36 – 45, 46 – 55 and 56 – 64 age groups, men overtake the women when it comes to purchasing life insurance policies," says Lenerd Louw, CEO of 1Lifedirect.
Louw continues: "Many believed that life insurance was only a requisite if you have dependants. These results prove that this is a fallacy. South Africans are learning from a young age that financial independence and financial responsibility is paramount, and are taking the necessary steps to guarantee their future stability.
Louw believes that the direct life insurance channel has a major role to play in this upsurge of younger people taking out life insurance.
"In the past, many viewed the South African life insurance industry as conservative and somewhat stagnant. The 'stuffy industry did not really resonate with hip and happening youngsters and so, many chose to disregard it and its seemingly daunting products. With the introduction of the direct route however, life insurance has been revitalized, simplified and modernized, as one can simply log onto the internet for a quote.
"In addition, many may have felt that they could not afford life insurance. However, with 1Lifedirect for example, a healthy 26 year old female can now purchase a R1-million life insurance policy for around as little as R115 per month*," says Louw.
Commenting on why life insurance is essential for this younger audience, Louw says: "A young adult may be paying off education loans and other debts. Nowadays, the financially independent young adult does not want to burden anyone else with their financial obligations and are therefore taking out Credit Life Cover which will, in the event of the policyholders’ death, pay out the outstanding capital on a short or long term debt, such as on a car or home, to the client’s loan provider. What’s more, this type of cover would protect the policyholder’s long or short term loan instalments if they become retrenched. Best of all is that, the younger you are when you acquire a life insurance policy, the cheaper your monthly premiums will be."
"Ultimately, when it comes to life insurance, starting young makes good financial sense," concludes Louw.
*Terms and Conditions Apply