Millennials & Gen Z, your health insurance might not be enough—Here is why

Joy Agwunobi 

Amid the hustle of career growth, financial planning, and the constant pursuit of stability, young professionals often find themselves caught in a cycle of earning and spending, with little room to consider life’s uncertainties.

Many wake up each day focused on deadlines, promotions, and investments, believing that health concerns are something to worry about later in life. But what happens when an unexpected illness disrupts everything they have worked so hard to build?

This was the core of a recent webinar titled “Young and Healthy? Why Millennials and Gen Z Should Care About Critical Illness Insurance,” organised by Coronation Life Assurance Limited. The discussion shed light on a tough but necessary reality that no matter how young or healthy one may feel today, unforeseen medical emergencies can strike at any time, bringing not just emotional distress but also significant financial strain.

The event emphasised why young professionals should rethink their approach to financial planning, not just in terms of wealth creation but also in protecting themselves from the devastating impact of critical illnesses.

Chukwuka Obodo, CEO and co-founder of MyMedicare, delivered a keynote address titled “Why Millennials & Gen Z Should Care About Critical Illness Insurance,” highlighting the significance of critical illness insurance from three key angles: why it matters, the reality of young people and critical illness, and what critical illness insurance entails.

Obodo emphasised a common belief among younger generations particularly millennials and Gen Z—that their youth makes them invulnerable to serious health conditions. Many young individuals focus on their careers and financial growth while neglecting their health. He pointed out that illnesses such as cancer, heart disease, hypertension, and diabetes do not discriminate based on age.

According to him, young people work tirelessly to build their financial security, only to later spend substantial amounts on medical care due to poor health management in their earlier years.

Explaining the financial burden of critical illnesses, Obodo cited statistics highlighting the high cost of healthcare in Nigeria, stating that, “An average household spends approximately 120,000 naira on healthcare. When compared to individual earnings, there is a serious financial mismatch.”  He stressed the importance of proactive health planning and securing critical illness insurance to alleviate unforeseen medical expenses.

Obodo presented alarming statistics about the prevalence of chronic illnesses among young Nigerians. “One in every three Nigerian adults is hypertensive, a concerning figure. In Africa, over 40 percent of the population lives with hypertension, while more than 24 million Africans have diabetes. WHO projections indicate a potential 100 percent increase in diabetes cases over the next two decades,” he noted, adding that these figures highlight the urgent need for young people to take their health seriously and consider insurance coverage.

Obodo stressed that lifestyle choices play a major role in health outcomes. Stress, poor diet, lack of physical activity, and inadequate rest contribute significantly to chronic health conditions. Many young professionals spend hours in sedentary jobs, often working from home, with little to no physical activity. Basic health habits like proper hydration are ignored—despite the recommendation that adults drink at least two to three litres of water daily.

“The younger generation needs to rethink how they prioritise their health. Simple lifestyle changes, such as staying hydrated, eating a balanced diet, exercising regularly, and getting enough sleep, can prevent many long-term illnesses,” Obodo noted.

Explaining the concept of critical illness insurance, Obodo described it as a type of policy that provides a lump sum payment when a policyholder is diagnosed with a serious medical condition. The payout, according to him, can be used to cover medical expenses, compensate for lost income, or manage other financial burdens resulting from illness. He stressed the importance of enrolling in such plans before developing any chronic conditions, ensuring that individuals have access to financial support in times of medical crises.

He also outlined key features of critical illness insurance, noting that it provides lump sum payouts for major illnesses, including cancer, heart attack, stroke, organ failure, and paralysis. Unlike traditional health insurance, which covers direct medical bills, critical illness insurance gives policyholders the flexibility to use the funds as needed, whether for medical treatments, rehabilitation, or other financial obligations. He emphasised that younger individuals benefit from lower premiums, as the cost of insurance rises with age and increased risk of chronic conditions.

Obodo highlighted the groups that would benefit the most from critical illness insurance, particularly young professionals and freelancers who often lack workplace coverage. He noted that many people in Nigeria struggle to pay medical bills in emergencies, a problem frequently seen on social media, where crowdfunding efforts attempt to cover hospital expenses. If these individuals had enrolled in critical illness insurance earlier, they would have been better equipped to handle medical emergencies without financial distress.

“With proper insurance, accessing medical care becomes seamless, eliminating out-of-pocket financial strain,” he added.

Obodo also pointed out that people with a family history of chronic illnesses should seriously consider such insurance. Genetic predisposition plays a crucial role in the development of conditions like diabetes and hypertension, and without proactive health management, individuals with a family history of such diseases face heightened risks. Lifestyle choices further contribute to these risks, making early financial planning essential.

Another group that should consider critical illness insurance includes individuals who are concerned about the rising costs of medical care. According to Obodo, the healthcare sector in Nigeria has seen significant price increases in recent years, with medical expenses now costing five to ten times more than they did just a few years ago. With inflation making healthcare increasingly unaffordable, having financial protection in place can help individuals maintain stability without depleting their savings.

With the availability of affordable critical illness insurance plans designed for young people, Obodo reiterated that health remains the most valuable asset. He cautioned against waiting for a wake-up call, urging individuals to take control of their well-being by making informed decisions. According to him,  by prioritising both health and financial security, young professionals can ensure a stable future, free from the devastating impact of unforeseen medical expenses.

Esther Adekunle, financial and strategic partnership manager at Coronation Life Assurance Limited,  emphasised the importance of financial protection through critical illness insurance. She highlighted that unforeseen circumstances, such as medical emergencies, could deplete an individual’s savings if there is no adequate financial cushion in place.

“The reason why we need to protect our money is that there are many unplanned events that can completely wipe out our finances. If you are not diligent enough about securing your financial future, situations like debt, fire outbreaks, illnesses, and diseases can have devastating effects. Without proper planning, these unexpected challenges could drain your resources,” Adekunle stated.

She underscored the significance of critical illness insurance, especially for Gen Z, millennials, and even older individuals. “Critical illness insurance is essentially your financial backup plan. When unexpected health crises arise, this plan serves as a safeguard by transferring the financial burden to the insurance company, which then pays out upon diagnosis of a covered condition,” she explained.

Adekunle further distinguished critical illness insurance from traditional health insurance, noting that while standard health plans cover hospitalisation and medical bills, they often come with limitations. ” At Coronation Life Assurance, our critical illness insurance plan provides a lump sum payout upon the diagnosis of early-stage critical illnesses such as cancer, hypertension, coma, kidney failure, and others. This lump sum can be used to cover treatment expenses, allowing policyholders to focus on recovery rather than financial concerns,” she added.

She also pointed out that treating critical illnesses often requires substantial financial resources, sometimes running into millions of naira. “With the current state of the economy, many people are primarily focused on meeting their daily needs. However, when a serious illness strikes, having a financial backup plan can make all the difference,” she stressed.

Addressing the limitations of Health Maintenance Organisation (HMO) plans, Adekunle acknowledged that while employer-sponsored health coverage is a commendable initiative, it is often insufficient for major health challenges. “Most companies provide health insurance plans for their employees, but these plans have restrictions. Some policies usually have annual limits—sometimes as low as ₦100,000—covering only basic healthcare needs like malaria treatment or routine medical tests,” she explained.

She further highlighted that many HMO plans do not cover the high costs associated with critical illnesses. “For instance, while an HMO may cover the initial diagnosis of diseases like cancer or kidney failure, it often excludes advanced treatment expenses. Many people assume they are adequately covered until they face a serious health issue and realise the limitations of their plan,” she said.

According to Adekunle, rather than resorting to fundraising campaigns in desperate situations, individuals should take proactive steps by securing a critical illness insurance policy. “We often see people seeking financial assistance during medical emergencies. Such unfortunate situations could be avoided if there was an adequate plan in place,” she noted.

Adekunle also called on the entertainment industry to encourage artists and actors to invest in critical illness insurance, recognising the financial instability many in the industry face during health crises. “This webinar is also a call to action for the entertainment industry. Celebrities and public figures should prioritise securing a financial backup plan. The best time to get this coverage is now, especially when you are young, as younger individuals pay lower premiums,” she advised.

She reiterated that taking proactive financial steps could save individuals from severe financial distress in the future. “Securing a critical illness insurance plan is not just a smart decision; it is a necessity for financial stability in uncertain times,”  Adekunle added.

In Nigeria, financial success often comes with an unspoken obligation: black tax. This refers to the expectation that one’s earnings must extend beyond personal needs to support family members by covering school fees, rent, medical expenses, and other financial burdens. For young professionals, this obligation, combined with student loans, the rising cost of living, rent, and self-improvement expenses such as professional courses, creates a heavy financial strain.

According to the World Bank, as of 2021, 30 per cent of Nigerians over the age of 15 paid domestic remittances—often referred to as black tax—a figure that declined by 9 per cent from 2014. Meanwhile, the 2023 Piggyvest Savings Report revealed that over four in five (83%) Nigerians earning an income contribute to black tax. Of these, 56 percent  pay it monthly, 27 percent pay occasionally, and only 17 percent  do not pay black tax at all.

Recognising the financial pressures that young professionals face, Emmanuel Kayode, executive advisor at Halogen Group, stressed the importance of making critical illness insurance (CII) a priority amid competing financial demands. He highlighted that a significant portion of black tax contributions is health-related and argued that securing an insurance plan could serve as a safeguard against unexpected medical expenses.

“If you consider all the things that make up black tax, a large chunk of it is health-related. Instead of repeatedly covering medical expenses for family members, why not invest in an insurance plan that offers long-term financial protection? There are good, affordable options available, and it’s crucial to recognise that no matter how careful you are in life, unexpected situations will always arise. The best way to mitigate their impact is to plan ahead,” Kayode stated.

Kayode also urged young professionals to rethink their approach to financial planning, pointing out that many individuals readily subscribe to digital services such as YouTube, Netflix, Prime Video, and Spotify but neglect more essential financial safety nets like insurance.

“Many of us are comfortable paying for multiple entertainment subscriptions. If you add up the amount spent on these services over time, it becomes clear that a small monthly commitment towards health insurance is just as feasible. The difference is that, unlike entertainment subscriptions, insurance provides a financial safety net that could prevent devastating financial losses in the future,” he explained.

He compared insurance to subscription models, emphasising how small, consistent payments can yield significant financial benefits. “When you subscribe to streaming platforms, you save money in the long run because paying per movie or per service would be far more expensive. In the same way, having an insurance plan helps you avoid large, unplanned medical expenses by spreading the cost over time.”

One of the major barriers preventing young Nigerians from investing in insurance is the perception that it is expensive. Kayode acknowledged this concern but stressed that insurance should not be seen as an extra expense, but rather as a financial backup plan that prevents bigger financial disasters.

“A lot of people still believe that insurance is too costly, but that mindset needs to change. It’s about prioritising what truly matters. Black tax will always be there—you can’t escape it. However, having an insurance plan ensures that when health-related emergencies arise, you are not left scrambling for funds or burdening your loved ones financially,” he noted.

In his welcome address, Adebowale Adesona, managing director at Coronation Life Assurance, highlighted the often-overlooked importance of critical illness insurance, particularly among young adults.

“Many young professionals prioritise career growth, smart investments, and enjoying life in the moment. As a result, insurance—especially critical illness insurance—may not seem like an immediate concern. We tend to assume that health challenges are a distant reality, something to worry about later in life. However, the truth is that unexpected health issues can arise at any time, and when they do, they bring serious financial and emotional burdens,” he stated.

Adesona emphasised that financial security is not just about accumulating wealth but also about safeguarding one’s future. “At Coronation Life Assurance, we believe that true financial security goes beyond wealth creation; it includes protection. You work hard to build your future, and it’s just as important to protect it. That’s why we organised this webinar: to shed light on the importance of critical illness insurance as a key component of financial planning. Beyond preparing for unforeseen health challenges, this session aims to debunk common misconceptions about critical illness insurance and provide practical guidance to help individuals make informed financial decisions,” he added.

As financial obligations continue to mount for young professionals in Nigeria, the experts highlighted that it is crucial to make strategic financial decisions that offer long-term protection, noting that critical illness insurance provides an essential safety net, helping to manage medical expenses while reducing the pressure of black tax.

By shifting perspectives and embracing insurance as a necessary financial tool, young Nigerians can secure their financial future while maintaining their support for family members in a more sustainable way.