Personalization Through Innovation: How Term Life Is Meeting Growing Needs

By Greg Faux

We live in an age of personalization and innovation. Today, we can customize just about every product or experience that we buy, and life insurance is no different. Millennials are taking note of what older generations are currently dealing with and are trying to mitigate those situations for themselves. They want to be equally proactive as their parents, but in a simpler and more personal approach.

During these past several months, many individuals have taken a long hard look at their financial goals and current levels of protection. In fact, according to a recent Life Happens survey conducted earlier this spring, more than two-thirds of Americans said that the events of this year have caused them to reexamine their finances.

Whether people are eying an early retirement, building more protection or creating a financial stability strategy for their loved ones, the insurance industry saw an uptick in individuals proactively seeking protection for themselves and their families.

However, many of the products available to provide that desired outcome may also be too expensive at their current stage in life. Younger generations, particularly millennials, are often saddled with substantial debt like student loans, while also already saving for their own children’s college plans. This has led many insurance companies to create more products that grow with their customers’ finances and needs. Term life insurance has proven itself to be one of these versatile products.

Life insurance should not only be affordable but also able to evolve and change as the insured does as well. Although some millennials may not have the means today for a product such as whole life insurance, those individuals still want affordable death benefit protection in the near term while preserving the ability to move into a more feature-rich product later as their needs change.

Consumers now have the ability to purchase additional features on converted permanent coverage, such as the ability to accelerate the death benefit through a long-term care services rider. Using this strategy not only helps protect against an untimely death but also has flexibility that, as a policyowner moves into different phases of their life, has already locked in the future protection even if they experience a change in health. With this feature, the term life policy can offer the protection a family needs now, while the living benefits under the LTC rider remain ready and available for when the insured is ready to move to a permanent policy.

Another feature that is becoming popular within life insurance products are those that highlight and contribute to greater social impact. Community involvement is a major, personal component of many people’s lives, particularly millennials and Generation Z. Features such as a charitable benefit rider offer a way for an individual to use their life insurance policy to pass on a percentage of their death benefit to a charity of their choice.

Coupled with increased affordability and the ability to be customized to suit individual needs or goals, term life has become a leader in recent insurance sales, particularly among younger buyers. For its simplicity, term life can be a straightforward option for insurance coverage. But beyond the choice of term lengths, there are a lot of other options and features that individuals can consider to create the strategy that suits what they want now, but also evolves with their needs.

As we continue to see a younger demographic enter the life insurance market, they will bring with them unique perspectives, needs, and goals. The insurance industry will continue its evolutionary march forward to meet those changes, while protecting the generations yet to come.

Greg Faux, is second vice president of product management at Guardian Life. Greg may be contacted at [email protected].