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Life insurance: Millenials aren't buying it

By James Dennin for Kapitall.

Write it off as youthful notions of invincibility, but the young aren't buying as much life insurance anymore. And the trend is starting to pressure the major life insurance providers. 

Almost half of the baby boomers purchased life insurance between the ages of 18-29. By some estimates that number has dropped by almost half among Millennials and fallen as low as 18%. 

As anyone familiar with the Obamacare debate knows, young people are essential to the insurance system. For life insurance to work the vast majority of the people paying into the system need to be alive. 

Currently firms are trying to adapt to a marketplace that is more skeptical of the product, and they're doing so in different ways. Some firms are diversifying the products they offer by selling retirement accounts and re-branding as a general "life planning" service. 

Others are working on more youthful marketing and advertising campaigns as a way to try and reach younger customers. 

On the flip side, the elderly—people over 65—are occupying a larger and larger portion of the population. And their demographics are more receptive to insurance, even though they also run a higher risk of dying. 

We decided to run a screen on insurance agencies working primarily in the life insurance space. We decided to screen for companies that seemed to have extra cash to expend on either new marketing techniques or on new products. 

Then we looked for companies with a high ratio of levered-free-cash to enterprise value (LFCF/EV). This means that the company has more money to spend relative to other companies of its size. 

This screen left us with six stocks on our list. Do you think the insurance industry will adapt to new challenges? Use the list below to begin your analysis and let us know what you think in the comments. 

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