Demonstrating the value of life insurance to Gen Z

By Rob Cullen

What often drives someone to meet with a financial advisor is a desire to protect what is most important to them. For some, this is their family, a home, or even their future retirement.

Life insurance is one tool that acts as a safety net for policyholders, but it is about more than a simple death benefit.

The importance of this protection is clear when the client has a family or assets to protect, but why would someone without a mortgage or a family of their own want life insurance? This is why engaging with the next generation of clients, specifically Generation Z (born 1997–2012), requires a fresh perspective.

While young professionals may see the policy as something to hold off on, we know that the opposite is true. Encouraging Gen Z to start now and prepare for what’s to come through a life insurance policy showcases your value to them as a financial partner and sets them up for whatever may come their way.

Getting to know Gen Z

A needs assessment is the best way to start the conversation around which insurance policies would be of value for any client. This is nothing new – the success of a financial advisor is often reliant on our ability to listen to a client’s goals or needs and determine the best step forward. However, the questions asked can be altered to better fit the mindset of a Gen Z client.

A great place to start is by reviewing the current landscape for most young professionals, keeping in mind this generation has always had access to the internet. They are likely to use AI for financial advice already. Ask yourself, “What do they already know and where can you shine light on something they still want to learn more about?”

I often say something like, “I’ve gone through a lot of training and I’ve learned a lot – I'm going to get to know you and find what solution is best for you,” to reiterate that I am here with them and not just to make a sale.

A client in this age group may not have a family or a home yet or even be familiar with the financial implications of those major life decisions. Their focus could be on building their career and renting while real estate markets fluctuate. Show them how preparation now leads to security when it’s needed most.

Making an emotional sale

At the end of the day, life insurance is a policy based heavily on emotions. Clients may put off the conversation rather than facing the harsh reality: death is inevitable. As advisors, we want to quell their fears and support them through planning.

For Gen Z, the conversation shifts from how they can support loved ones in the case of their passing to demonstrating potential growth. I find it best to share my screen with a compound interest calculator and walk them through the following scenario: Let’s say we start with a policy that requires a $100 month premium with 8% interest through to age 65.

Then, show how waiting 5 years drastically changes the amount available to them through growth. As I mentioned, Gen Z are familiar with technology and using a tool they can easily follow along with catches their attention more than saying “trust me, start now.”

As you provide examples, walk the client through the pros and cons of a term versus a permanent policy. An easy way to frame the two types is by referencing a topic they can understand, like renting versus owning a home.

Term is like renting an apartment: you know that if you keep paying rent, you will have a roof over your head. However, if you stop paying rent, you no longer benefit and likely have nothing to show for the investment.

A permanent policy is more aligned with owning a home: while payment structure deviates, the investment made builds equity. Unlike renting, you can benefit from cash value when needed. Pairing this explanation with the growth example provides tactile reasoning for why life insurance is valuable to Gen Z.

Adjusting the approach based on client values is nothing new to us. What can be challenging is connecting with someone who has experienced the world in a completely different light. Work to understand what Gen Z cares about and apply that in your process.

Position yourself as their go-to financial partner and products like a life insurance policy will be of value to them and ultimately secure a new stream of clients.

About the MDRT member

Rob Cullen, FSCP, MBA is a 15-year MDRT member, achieving Top of the Table status for 9 years.