Gen Z feels ‘overwhelmed’ and ‘anxious’ about insurance

Generation Z is the newest generation to reach adulthood and the thought of dealing with insurance makes Gen Z overwhelmed and anxious.

That was one of the findings from a National Association of Insurance Commissioners survey of Gen Z attitudes about insurance.

More than half of Gen Zers surveyed (54%) said they felt overwhelmed or anxious about dealing with insurance. More than 1 in 5 (22%) said they feel frustrated about dealing with insurance, while 14% said the thinking about insurance makes them feel old.

Gen Zers aren’t in any hurry to buy insurance either, the survey showed. Although 39% of them said they already own life insurance, more than one-third (34%) said they are putting off buying it as long as possible. More than one-quarter (28%) said they are delaying purchasing health insurance while 19% said they plan to wait as long as they can to buy renters insurance.

Knowledge lacking

Maybe part of the reason for Gen Z’s anxiety about buying insurance is that they lack knowledge of insurance terms. The survey showed 36% of them can’t provide a definition of “out-of-pocket” while 32% don’t know the definition of “claim” and 29% don’t know what a “copay” is.

Despite their lack of knowledge about insurance, Gen Zers do believe it is important. The survey showed 86% believe health insurance is somewhat or very important, while 76% said they believe the same about life insurance.

Andrew Mais, NAIC President and Connecticut Insurance Commissioner, told InsuranceNewsNet that the survey was commissioned as part of his theme for his year as president, which is “Mind the Gap.”

“I think we have a significant coverage gap all over the place in terms of life products, retirement products, property/casualty products, and we need to have that gap addressed so people have the protection that they deserve,” he said. “We wanted to see what was going on with Gen Z. Those are the people who are starting out in life, and what they do now could well have a significant impact on their financial future. We wanted to understand what they understood about insurance, so that we can properly communicate the importance of insurance to them”

The industry needs to make a shift in its traditional marketing if it wants to reach Gen Z, Mais said.

Meet Gen Z 'where they are'

“You need to meet them where they are. It won’t be a newspaper column; it may be a post on social media. You must look at the way Gen Zers communicate with each other – whether it’s on YouTube or TikTok or whatever – and be there in that space to provide the information they need.”

Mais said one motivation behind the survey was to find out what Gen Z already understands about insurance.

“We found there was a significant lack of knowledge about insurance products, and that could lead to decisions that are not necessarily the best for these young people as they start to build their financial and their personal futures.”

With the survey revealing more than half of Gen Zers are overwhelmed or anxious about dealing with insurance, “that's not the kind of thing that makes you think that they're going to engage with insurance as they properly should,” Mais said.

The survey results show a need for financial literacy education, especially education about insurance products, he said.

As for advisors, the survey results show that young adults need a professional who can help them make the right decisions about insurance, Mais said.

“Reach out to these young people. They may not be the biggest buyers now, but that will change as they have families. They will be the consumers of the future. Explain insurance to them, make sure they understand the different coverages that are available and keep in mind that just because they say no now doesn't mean they may not need it later.”

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.