Why are more younger generations buying long term care and life insurance?

Would it surprise you to hear that people in their 20s and 30s represent almost half of the purchases we see for Trustmark Voluntary Benefits’ life and long-term care (LTC) insurance? When you consider that hybrid life and long-term care products allow people to get two benefits in one it starts to make sense.

A 2023 LIMRA survey found that 44% of Gen Z adults and a whopping 50% of millennials intend to buy life insurance over the next year. So, what is happening here? Why are all these young people suddenly more worried about their long-term health prospects?

Well, for starters, COVID happened. The pandemic had a profound effect on many of us—especially when it came to our health and views on mortality. One of the barriers to the purchase of life insurance is some people believe that dying prematurely won’t happen to them. Unfortunately, one of the impacts of COVID was that people saw it could happen to them and it gave a different perspective on insurance.

But that then begs the question “why hybrid insurance that includes LTC?” After all, life insurance is readily available to individuals in their 20s and 30s. And it’s something we often consider purchasing when we’re young as our families are starting to form.

Many young people have been exposed to a family member who has required care and they’ve seen the impact of that care on the rest of their family. When a grandparent or other relative needs care, they are getting a first-hand look at what that means for their parents. Either their parents are providing some of the care for their family members (maybe their parents are now living with their grandparents) or they are participating in organizing the care. Either way, the children see the emotional, physical and mental toll of care on their parents.

When you consider this, it might come as less of a surprise that younger generations are taking an interest in long-term care insurance. A 2021 LIMRA Insurance Barometer Report says millennials are more concerned about care expenses than any other generation. And millennials rank care and life insurance among the top areas they’d like to discuss with an advisor.

While paying for a long-term care policy that they don’t expect to use for decades may sound odd at first, when you combine the benefit with life insurance – something they do need now – it starts to make sense. The motivations behind purchasing life insurance and LTC insurance are very similar – they are both about protecting those that you love. And being young has its advantages; young customers can get a lot of coverage at very low rates, making hybrid insurance a practical way to efficiently kill two birds with one stone.

Another factor driving interest in these solutions is the media. Long-term care has become a topic that is widely covered for a couple of key reasons. One is that we have an aging population. According to the US Census Bureau, by 2035 the United States is going to have more people over the age of 65 than under the age of 18 for the first time in our history. People are living longer than they used to, which is driving a greater need for care in later years.

Second, this need for care has been driving states to look at legislative solutions—and the media have covered this issue in-depth as well. The state of Washington was the first to implement a program when they passed Washington Cares, a state-run program that can provide up to $100 per day for the period of a year to help pay for long-term care. Since Washington passed their program, other states have been looking at this as well.

Related: Caregiving crisis prompts search for long-term care solutions

So, what steps should HR leaders be taking? For starters, talk to your employees. Young people are clearly interested in long-term care and life insurance—but many have limited knowledge. Brokers and their clients can do some of the homework themselves, too. Consider a range of long-term care insurance options and what may be best to offer your employees or clients. Stand-alone long-term care insurance is available, but the truth is the stand-alone long-term care insurance market has changed a lot over the last 20 years. It’s worth looking at offering those options through the workplace, but increasingly, employers are turning to hybrid life and care options.

These options offer meaningful advantages such as guaranteed issue underwriting and the knowledge that employees will be able to collect a benefit one way or another. That being said, there’s a variety of products on the market each with strengths and weaknesses, so rely on your broker and carrier partners to help find the right product for your group.

What was once something people in only their 50s and 60s started to think about, long-term care and life insurance is starting to become a very real option for employees in their 20s and 30s. Meet this interest head on. Start talking to your younger employees about long-term care and life insurance. They’ll thank you later.

Adam Bezman is the Executive Director of Product and Innovation at Trustmark and is a Certified in Long-Term Care® designee.