Millennials are at serious risk of being unable to meet their financial obligations because they are 'dangerously under-protected', an insurance boss has warned.
Mark Holweger, managing director of Legal & General Insurance (Partnerships), said advisers needed to do more to engage young people and millennials when it comes to insurance, because this generation was ill-prepared financially.
He commented: "The idea that millennials ‘do things differently’ has long been accepted, and the protection market is no exception.
"Traditional life-stages such as buying a home, getting married and having children have historically prompted other generations to assess their protection needs.
"However, with these events happening later for members of Generation Y, the risk is that today’s average millennial is left dangerously under-protected."
Mr Holweger said it was a "hard truth" that illness, misfortune or injury can strike anyone at any time, irrespective of age.
He pointed to L&G's 2016 claims data, which showed that 21 per cent of critical illness claims were paid out to people aged between 20-39, with the most common condition across all claimants being cancer.
According to a report earlier this month from FTAdviser, statistics from Cancer Research/Office for National Statistics show the greatest increase in cancer mortality rates since the early 1970s has been in people aged 0 to 24.
Mr Holweger added: "Lifestyles may change from one generation to the next, but the need to financially protect that lifestyle remains a constant.
"Regardless of whether someone rents or owns their own property, they are likely to have significant financial obligations which would be difficult meet if they were unable to work for a long period of time.
“Advisers play a crucial role in raising awareness of the need for protection, especially among at-risk groups, such as millennials."
He acknowledged that having the tough ‘what if’ conversations are never easy, for advisers, but added: "If we are to ensure future generations are prepared for what may lie ahead, now more than ever, these conversations are becoming vital."
Mark Dennison, principal of LightBlue UK, told FTAdviser: “With less state assistance available, millennials have a greater need to look at protecting their incomes and obtaining life and critical illness cover when they can afford it, preferably while they are still young.
“Innovative policies are now available to tailor the cost of things like income protection to a tighter budget, so getting advice is always best, in order to make sure as much protection as is needed can be obtained for the budget available.”
simoney.kyriakou@ft.com
