Expressing a strong desire to be financially secure as soon as possible, insurance policy buyers under the age of 40 are choosing whole life over other asset alternatives and paying off their policies early, according to a national survey released Tuesday by Guardian Life Insurance Co. of America.
The Guardian survey revealed that a significant number of these Millenial and Gen X policy holders are opting to pay for their policies quickly, often over 10 years or less. Of those surveyed by Guardian, 35% of whole life purchasers under 40 said they wanted to pay off their premiums as quickly as possible, rather than using the more traditional approach of paying over a lifetime.
"This finding underscores a pronounced desire among Millenials and Gen Xers for financial security at an early age," said Michael Ferik, Guardian's senior vice president of individual life, at the New York-based insurer's second annual Whole Life Forum in Manhattan, according to a prepared statement.
The survey, conducted in August by the Melior Group, Philadelphia, involved 242 whole life policy holders. The sample included 155 non-customers and was supplemented by interviews with 87 Guardian customers. A total of 109 whole life owners under the age of 40 and 133 over the age of 40 participated in the survey online and by telephone.
At the forum, Ferik said that the median age for whole life annual sales is 37. Noting that he is 38, Ferik described himself as a "prototypical" whole life buyer, saying he bought a policy because he lost money in the stock market in 2009 and rethought his personal finances when his son was born. He purchased a whole life plan in April 2009.
"This felt like a safe investment," he said, adding that the perception of whole life insurance has changed more than the product itself. "Mindsets today are more conservative and forward-thinking."
