Millennials outnumber Baby Boomers in the United States by more than eight million and represent more than a quarter of the American population. We also must turn some of our attention to the Gen Z demographic who are just in recent years entering the workforce. We are now faced with an intriguing dichotomy. Our greatest sources of prospective clientele now fall upon the youth and those nearing retirement–opposite ends of the spectrum. As an industry, specifically in the life and disability insurance markets, we must cater to both of those demographics if our businesses are to prosper. But how do we focus on groupings of persons who seem to be so different, including their values, ideologies and lifestyles? As insurance purveyors, we must wear different hats at different times. We must be flexible and embrace sometimes contradictory marketing methodologies.
Baby Boomers represent the politically and socially radical past of this country, but they have over time moved into a new era in life. They have well-established family dynamics, including grown-up children and grandchildren. They have become more conservative over the years, and while many of your older clients may have embraced much of today’s incredible technologies, marketing preferences generally remain antiquated among matured audiences. They remain preferential to print advertising and get their news outside of social media platforms, and they respond better to direct-contact marketing and face-to-face sales techniques than other demographics. A Boomer is a true salesperson’s prospect. They are self-aware of their age, their limitations and their need for financial protection insurances. Their way of thinking is more analytical and deliberate but can also be very stubborn.
As Americans are living longer and working longer than ever before, millions of Boomers are continuing to hold employment well into their sixties and seventies. There is a true fear of retirement as Boomers ponder their own savings accumulations. Many have failed to sufficiently save for retirement and cannot rely on social security or other government-sponsored benefits to provide for them and their spouses as they age.
Persons of older age need to insure their incomes for as long as they can as much as their younger counterparts do. And as a workforce nears the matured end of the spectrum, disability insurance becomes imperative.
Unlike in past decades, the U.S. disability market does seem to be taking the aging of a substantial section of the workforce into account, liberalizing participation limits and age restrictions like never before. Traditional DI carriers are frequently providing monthly disability benefits to age 67 and sometimes to age 70. Some traditional disability companies are issuing new income protection policies to men and women over the age of 60 which was uncommon 10 years ago. These are great strides the industry has made to keep up with contemporary economics and current demand. But it is not enough.
Since the onset of the COVID era, the carriers offering benefits to near-retirement clients are keeping their distance from the deep end of the risk pool. Their participation limits and benefit levels remain timid for older age income earners. They also maintain strict occupation class restrictions on aged clientele, especially those with any sort of adverse health history.
Specialty DI markets like Lloyd’s of London offer more comprehensive financial planning for persons nearing retirement. Those markets have the unique ability to provide long and short-term “own occupation” disability benefits to clients in their sixties and even seventies. Plans are also flexible enough to cater to those with health concerns.
For the aging workforce of the U.S., financial planning can go hand in hand with retirement planning. Prudent advisors will coach their clients into sufficient income protection no matter where they fall on the age spectrum. Retirement planning for Baby Boomers as well as Millennials begins and ends with income protection.
Americans deeply fear outliving their money in retirement. Yet, these concerns don’t always lead to subsequent real-life accountability since most people of working age aren’t making substantial progress toward increasing personal savings. The detrimental cycle continues. We worry about having enough retirement income and savings to live out our “golden years” in comfort, but we hardly take the steps necessary to achieve sufficient capital accumulation for use later in life.
Social Security is hardly the answer. The funds are relatively miniscule to those with average to affluent lifestyles, and with many Boomers having reached historical retirement age, projections show that the outtake of benefits may soon outgrow the intake of taxes. Social Security reservoirs are dwindling. Saving must take place proactively before retirement, while a person is still a producer and an earner.
401(k), IRA and similar plans are attractive to consumers and another step in the right direction. Those with access to employer-sponsored retirement savings programs are gaining more understanding and more trust in placing higher levels of income into retirement accounts, and with more employers matching or adding contributions, these accounts have become among the strongest wealth savings vehicles available to employed Americans.
However, considering recent volatility, we can’t completely count on market performance of retirement accounts or other personal investments. More importantly, we can’t guarantee that regular payments will continue to sufficiently build those coveted retirement funds. What would your client do if he/she were to suffer an illness or injury that resulted in long-term disablement? What would eventually happen to your client’s income? Who would continue making contributions to your client’s retirement savings? If your client became disabled, eventually he/she would no longer be able to work nor receive an income. Any total debilitation would result in your client struggling to financially survive today as well as into traditional retirement years.
Disability income insurance is one of the greatest retirement planning tools. Without the protection of a comprehensive disability insurance package, clients of any age stand to lose their ability to effectively accumulate wealth and savings for use in the later years of life. Over the last several decades, life expectancy has increased in the United States, creating a greater need for proper savings safeguards like disability insurance, not only for retiring Boomers, but for those with a long career ahead.
Millennials as well as the fledgling Gen Z are a completely different breed from the Boomer generation when it comes to successful disability insurance marketing. They generally believe they are physically impervious to accidents and sickness. Furthermore, they were born with smartphones in their hands and computers at their fingertips. They are impatient and think they know everything, or at the very least they think they can do everything better than previous generations. And they are probably correct. They can certainly obtain information faster than ever before, and they are intelligent; more young Americans have college educations than ever before. But most importantly, Millennials understand how to use and leverage technology better than their forefathers which makes them adept in employing social media and other electronic resources to communicate, find their news, do their shopping and research and purchase their insurance policies. They have grown-up with social media, and they trust and rely on electronic forms of commerce and communication.
So, there is the dilemma. We are faced with completely different demographics of prospective clients, all of which are well worth the trouble of going after. Are your current marketing strategies going to afford you the opportunity of targeting both the young and those nearing retirement? You must adapt. Remain a true insurance salesperson, but do so on multiple levels, in multiple mediums to multiple audiences.
That is the reality. We must continue to diversify our marketing and sales techniques to reach all available markets. Like most other financial industries, the future of this business will inevitably be primarily focused on technology, ease, speed and efficiency of policy issuance and delivery.
Millennials and Gen Z certainly represent the present and future of the U.S. economy, and they have changed the way much of the world conducts business. To achieve success in this industry, we must embrace and indulge in the preferences of both the young and the old. These continue to be intriguing and challenging times from an advisor’s perspective, but the future holds endless opportunities if you are respectful to diverse marketplaces, are able to learn new tricks and are willing to adapt.