Life insurance must zoom at the speed of Gen Z

By Tim Heslin

Generation Z means business when it comes to financial planning. Corebridge Financial research finds 73% of this age group reports they begin to “get serious” about their finances between the ages of 18 and 25.

At the same time, in its 2024 Insurance Barometer Study, LIMRA pegged Gen Z as having the highest life insurance need, with the largest gap between self-identified need and coverage owned.

How can insurance agents and financial professionals help bridge this disconnect? How can our industry help this financially precocious generation understand that life insurance is a critical component of serious financial planning?

The short answer is that we must move at the speed of Gen Z.

This generation has lived their entire lives in an internet-enabled world. Since they were kids, Gen Zers have been able to source product information on demand and purchase almost anything within minutes.

As a result, we must make the life insurance process simpler, quicker, more flexible and more contemporary. We also must tailor our approach to meet Gen Zers where they want to be met. Finally, our industry can help this generation take action to safeguard their future.

Gen Z entering their adult era

At first glance, with an age range starting at only 12, Gen Z might seem like an unusual cohort to be named a key generation for closing the life insurance coverage gap.

The oldest members, however, turn 27 this year and are on the cusp of the average age when most Americans go through the major life changes that inspire them to seek coverage. Over the next five years, increasing numbers of Gen Zers will get married, start families or purchase a home. As an example, one real estate company’s analysis of U.S. Census Bureau data finds 28% of 24-year-old zoomers were already homeowners in 2023, as were 30% of 26-year-old zoomers.

The magnitude of these life milestones appears to be having an impact across Gen Z, with LIMRA finding that nearly half (49%) of Americans between 18 and 26 say they either need to purchase new life insurance coverage or need to increase their existing coverage.

In other words, if it’s not already, life insurance will soon become a pressing financial need for this age group. This demographic trend is one to get ahead of — instead of falling behind.

Make the case for buying life insurance young

Though Gen Z appears broadly aware of the importance of life insurance, they might remain undereducated on the benefits of securing coverage at an early age. In LIMRA’s polling, 37% of Gen Z respondents said they haven’t purchased life insurance because it is too expensive, and 30% said that they have other financial priorities. Perhaps most tellingly, 37% “just haven’t gotten around to it.”

Gen Z knows that life insurance is important; they just don’t consider it a current priority. And like many Americans, they considerably overestimate how much it will cost.

This is all vital information for agents and financial professionals.

Although a healthy 25-year-old with no dependents might not need life insurance right now, an agent can help them understand that they might need it soon, with protection playing an important part in a broader financial plan. Additionally, if they are able to buy life insurance when they are young and healthy, a Gen Zer can lock in lower rates that could ultimately save thousands of dollars in premiums.

When talking to Gen Z clients and prospects, ask them questions that can help them identify whether they are in this favorable zone to purchase coverage, or whether they should perhaps revisit the conversation in a few years. Consider getting personal with your clients to get them thinking about why protection might need to be part of their financial plan. Ask them:

» Are there people in your life who rely on you financially?

» Do you have parents or older relatives who might need help financially as they age if you’re not there?

» Do you share household expenses with a romantic partner?

» When could you see yourself becoming a parent?

» Are you currently or do you plan to become a homeowner?

When speaking to Gen Z clients, you are talking to young adults who may be stepping into significant financial responsibilities, perhaps for the first time.

Keep in mind that Gen Zers might be hyperfocused on their monthly budgets and looking for ways to save money rather than spend money. After reminding them that life insurance can be less expensive than they might expect, try to make a more personal, emotional connection around the importance of coverage.

If they’re getting married, having children or buying a home — either now or plan to in a few years — then protection needs to be part of their financial plan, but you might have to explain why.

Hang out where Gen Z is already tuning in

To get Gen Z clients in the door for these real-world conversations, consider beginning outreach and engagement online. According to a 2023 survey conducted for Forbes, 79% of young people said they sought financial tips and guidance from social media, and 33% did the same with internet searches.

When it comes to social media, remember that Gen Z grew up in the age of the influencer. They are interested in real-world examples of people using products and applying what they see online to their own life. Consider using social media or blog posts to reach Gen Z clients where they already are consuming financial information.

If you have a particularly enthusiastic Gen Z client, consider encouraging them to talk — or even post — about their experience working with you to get coverage. They can act as a sort of micro-influencer to help their friends see the value of life insurance and your expertise.

These techniques can be helpful across all age groups when you’re looking for prospects and interacting with clients. However, they are especially important when you want to connect with Gen Z.

Offer access to digital tools

Our industry has made significant advances over the last few years to make the process for getting life insurance much closer to the online experience Gen Z expects for their everyday shopping. Some life insurance digital platforms have enough flexibility built in so agents and financial professionals can work alongside their clients.

When speaking with Gen Z clients, reassuring them that they will have the ability to apply through an online portal can go a long way in helping them move from simply interested in life insurance to taking action with an application.

Another helpful step is highlighting that some digital platforms feature a self-completed health questionnaire. For many Zoomers, who are used to filling out forms online, handling this step at any hour in any location will be the preferred way to go. Others will want to sit with an agent and walk through the application while receiving professional guidance.

With increased digitalization and automation, agents and other financial professionals have the opportunity to highlight just how quick the process can be with these recent advances.

Agents can meet Gen Z’s need for speed by working with insurers that have developed end-to-end platforms that decrease the time to issue. In some instances, clients using these tools can find out the status of their application within minutes of completion.

Zoomers have spent their whole lives being able to make major decisions with just a few clicks. Now, as the oldest cohort of Gen Z becomes homeowners, enters committed relationships and thinks about building families, let’s use this Life Insurance Awareness Month to get them to start thinking about protection as an essential component of a financial plan.

Over the next decade, Gen Z will age from a tertiary target to the primary base of your life insurance business. Taking steps to reach them today can help future-proof your practice for
tomorrow.