Insurance Terms Confuse Young Consumers: NAIC
A lack of basic knowledge might be contributing to Generation Z's anxiety about the topic.
Companies that want to sell life insurance, annuities and related products and services to the youngest adults will have to do more to explain what the words mean.
Only 32% of U.S. residents ages 18 through 27 told a survey team that they know what an insurance claim is, according to the National Association of Insurance Commissioners.
The share indicating that they understood a term was 27% for deductible and 25% for health savings account.
What it means: Many young people in the target market for insurance and financial services products have no idea what the sellers are talking about.
The survey: The NAIC sponsored an online survey to find out what members of Generation Z think about insurance. The sample included 1,003 people.
The NAIC did not give the participants an insurance vocabulary test.
Policygenius, an online broker, has given consumers similar surveys and included vocabulary tests. It has reported data suggesting that only about half of the consumers who are sophisticated enough to take an online survey and who say they understand an insurance term actually understand the term.
More data: The NAIC found that the high level of confusion about insurance correlated with a high level of Gen Z consumer discomfort with thinking about insurance.
The survey team asked participants to provide a word showing how thinking of dealing with insurance makes them feel. About 38% said “responsible,” and 18% said “grateful.” But 38% said “overwhelmed”; 32%, “anxious”; and 22%, “frustrated.”
Roughly 34% said they would put off getting their own life insurance as long as possible.
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