By Denise Flannery
In the life insurance industry, where the average advisor is 58 years old, there is a perception that millennials (born between 1978 and 1995) are too young and in too much debt to even begin talking about life insurance. But, the reality is quite different. Many in this generation are making a significant amount of money and are doing a good job saving. Yet, most millennials are not even thinking about life insurance, and if they are, it’s likely that they’re not properly covered.
Life Insurance Awareness Month is the perfect time to draw more attention to this group because our industry has been slow to acknowledge the clout of the millennials. Penn Mutual conducted a comprehensive segmentation study to dive deep into the needs and priorities of consumers. We identified eight segments of consumers, and not surprisingly, millennials fall into five of those segments. Each segment has different characteristics but three particular segments present a huge opportunity for financial professionals.
Up and Comers. This group, made up entirely of millennials, is optimistic and poised for success. They are financially savvy and are just starting to build relationships with financial professionals. While they’re less likely than other segments to be married or have kids, many do have spouses and children. Additionally, 23 percent of “up and comers” earn $100,000 or more, while 41 percent save at least 20 percent of their annual income.
Opportunity: At this stage in their life, this group needs to be educated about the importance of starting early with a sound financial plan and the living benefits life insurance can offer. In fact, according to the Global Financial Literacy Excellence Center, only 29 percent of millennials received financial education through school or work. This presents a great opportunity to capitalize on the millennials’ desire for a trusted relationship, and to teach them about how life insurance can not only provide protection, but build cash value.
Life Enthusiasts. More than three-quarters (76 percent) of this group is comprised of millennials. This segment is passionate about all of the new things they’re experiencing in life – a marriage, a child or a new home. This group has a big need for life insurance protection and they need to understand the importance of protecting their family, especially while they’re young and healthy.
Opportunity: While 54 percent of this group is working with some type of financial professional, the majority don’t have life insurance. A financial professional can reach this group and ensure that all the great things they’re experiencing for the first time are properly protected for a secure financial future. Protection is most important to this group, but it will also open doors to explore other planning needs.
Traditionalists. While millennials comprise 18 percent of this group, it’s important to note that the members of this segment are planners. Many already have some form of life insurance protection, but the majority are only covered through work, don’t have the proper amount of coverage or have only term life insurance. They likely think they’re all set, when in fact they need to take a closer look at the planning they’ve already completed.
Opportunity: Financial professionals can reach this group and revisit their existing strategy to offer improvements. They can educate them on the importance of not only having the proper amount of coverage, but also on the value permanent life insurance can provide to them throughout their lives.
As September draws to an end, let’s not forget how important it is for all of us in the life insurance industry to keep educating our clients, prospects and the public on the critical role life insurance plays in a sound financial plan. Furthermore, millennials are proving to be a pivotal generation that the industry needs to start paying closer attention to before it’s too late.
Denise Flannery is senior vice president of strategic marketing, planning and communications at Penn Mutual. Denise may be contacted at [email protected].