A blind spot for younger Americans: Prioritizing investing over insurance

Six in ten younger Americans—61 % of Gen Z'ers and 60% of millennials—are placing too much emphasis on building wealth and growing their assets without dedicating enough to protecting those assets and managing risk with life or disability insurance, according to Northwestern Mutual’s 2025 Planning & Progress Study.

In explaining the focus of younger consumers on wealth building, Jason Thrap, wealth management advisor at Northwestern Mutual, said that it is wonderful to see the enthusiasm among younger generations to start saving and investing earlier in life. For many, he added, the trends of cryptocurrency, meme stocks and FinTok influencers piqued their interest, leading them to explore other, more proven strategies to build wealth, like investments.

Digital platforms empower younger Americans

Younger consumers are also driven by the desire for financial independence and security, especially after witnessing the economic challenges faced by previous generations, added Thrap. “The accessibility of investment platforms and financial information through digital means has empowered them to take control of their financial futures,” he said.

Additionally, the societal emphasis on success and material wealth has further motivated them to prioritize wealth accumulation. But, Thrap pointed out, this focus on building wealth often overshadows the importance of protecting that wealth.

A plan that includes investments only leaves people vulnerable to risks in life, added Thrap. Sudden injuries, illnesses, accidents or the death of a loved one happen more often than people realize, and if they have not prepared for them in advance, these emotional moments can also become very difficult financially. “As an advisor,” he said, “it is our role to meet people where they are, identify potential blind spots, and help clients build comprehensive plans for financial security.”

These blind spots refer to the lack of attention to protection products like life and disability insurance. According to Thrap, the disadvantages of this lack of attention are significant and include:

• Individuals may face severe financial hardship and instability during unexpected life events without protective measures.
• Financial difficulties can exacerbate the emotional toll of dealing with life crises.
• Lack of protection can derail long-term financial goals and plans, making recovery difficult.
  

  Why younger consumers lack focus

There are many reasons younger consumers do not often place similar importance on acquiring protection products, said Thrap. But the biggest reason is that there are too few financial advisors in America, and not enough are seeking to help younger professionals.

“As advisors,” he said, “we build relationships with clients, ask questions about their biggest dreams and concerns, and then help them custom-build a plan that is right for them. Our industry needs to grow to help free more people from financial anxiety – and in 2025, Northwestern Mutual has a goal to recruit 5,000 new financial professionals and college representatives.”

Another reason is the perception among younger consumers that they are invincible, and that insurance is something that can be delayed until later in life, added Thrap. There is also a general lack of awareness and understanding of how these protection products work and their importance. Furthermore, the immediate gratification culture and financial pressures, such as student loans and high living costs, often push long-term planning to the back burner.
Selling more protection products to younger consumers

So, what can financial professionals do to sell more protection products to younger Americans? “It starts with slowing down, taking time to build relationships, one at a time, and asking better questions,” said Thrap. “Instead of selling products, financial professionals should be helping people to create financial plans that create wealth and protect what they have already built. At Northwestern Mutual, we know that a comprehensive financial plan – combining investments with permanent life insurance and annuities – is designed and proven to deliver superior outcomes for people over the long term.”

When it comes to younger Americans, Thrap added that financial professionals can focus on the following strategies:

• Educating their clients and providing clear, accessible information about the benefits of protection products and how they fit into a comprehensive financial plan.
• Offering tailored and customized solutions to meet younger consumers’ specific needs and concerns.
• Establishing trust by demonstrating a genuine interest in the clients’ overall well-being, not just their financial assets.
• Highlighting real-life examples and case studies to illustrate the potential risks and the importance of being prepared.

“By implementing these approaches, Thrap said, “financial professionals can help younger consumers understand the critical role of protection products in achieving long-term financial security.”

The 2025 Planning & Progress Study was conducted by The Harris Poll on behalf of Northwestern Mutual among 4,626 U.S. adults aged 18 or older. The survey was conducted online between January 2 and January 19, 2025. A complete survey methodology is available.

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