The Millennials Perspective

As you've probably heard is common of my generation, I get my news on my Apple devices. Yes, I'm a millennial; no, I'm not referring only to social media. News apps make it easy to scroll through articles and updates from various reputable publications all in one place. As a millennial who happens to be a professional in the life insurance industry, the negative portrayal of life insurance in many editorials concerns me.

Insurance companies, independent marketing organizations and agents themselves have spent a great deal of effort to promote transparency and education by using the far reach of technology and media. But many in media perpetuate the bad rep that life insurance is one size fits all, anything outside of term life insurance is a gimmick, and that advisors are only out for their sales commission and not to be trusted.

This antiquated message unfortunately echoes digitally when you consider how many people, as I am, are seeing these articles one-after-another in one centralized hub. A few statements back, I specifically described the publications that have been the source of many of these articles as "reputable," and there is a reason I emphasize that. When I come across one of these articles from a well-known source for financial or business news, there is one issue that strikes me. If I were completely unfamiliar with life insurance and were to read this article, the negative depiction of life insurance may be likely to stick with me.

The writers themselves should not be discredited for their experience following and reporting about the financial sector. The problem is that the life insurance industry has evolved while their personal experience with it has not. If advisors truly want to reach people, especially millennials, start with understanding the messages people already receive about life insurance. Then look at ways you can help to expand their knowledge past these negative impressions.

“Advisors are only out for their commissions, don't get conned." I especially hate to encounter this message. Would it be true to say that any industry's workforce is equal in qualification, knowledge and business practices? No, it would not.

Many consumers may benefit from advice that encourages them to seek out an advisor with strong references, qualifications and with whom they can have an open line of communication.  However, telling consumers that all advisors are only looking out for their commissions and are out to "con" clients is an irresponsible message to spread. It may do more harm than good for the reader whom this advice is meant to "protect."

Results from LIMRA's recent 2016 Insurance Barometer Study indicate that more than half of Americans prefer to buy life insurance in person. Three out of four of these people say their reason for wanting to meet with an advisor is so that they may ask questions. People want to have their questions answered and are looking to understand life insurance. Walking into a room on the offensive with doubts about an advisor’s motives turns an open, informative conversation into a murky one. In situations like this, people feel conflicted and are more inclined to put off getting the coverage that they truly need.

Putting Fine Crystal In An Inflatable Cabinet

One message consumers frequently hear is something like this: “Buy term life insurance when you have small children so they have money if you die. Buy any other type of life insurance and you’re a sucker.” Now, I’m no carpenter but if someone proposed to me that they would build exactly what I need without knowing the room it will go in, the dimensions, the hardware to be considered or any other details specific to my needs, I would expect to receive an inflatable, blowup cabinet. Do you feel secure about putting fine crystal in a blowup cabinet? Of course not!

So again, reporters who are poised to “protect” readers against taking advice not in their best interest are taking an irresponsible stance here.  I’m not implying intended malice, but trying to shed light on how generational differences impact the writer’s opinion of life insurance. The fact of the matter is that these columnists are not experts in life insurance product portfolios and are drawing upon their own personal experiences, which can be quite outdated.

Is term insurance a suitable policy for many people? Yes. Does it fall short of meeting the coverage needs of many others? Yes. Life insurance is not one size fits all. Current life insurance product offerings have evolved to meet the current needs of today.

Consider that in a recent Natixis survey, 82 percent of millennials said they believe employers should be required to offer retirement plans and 84 percent believe the investment options should reflect their personal values. Whether your millennial client is a business owner or a key employee, there is a demand for more comprehensive solutions than just traditional 401(k)s. Life insurance also can offer a range of benefits.

Without a frame of reference other than their parent’s experience, “what you should know” lists and outdated opinion columns, how can we expect anyone to be aware of the many roles that life insurance may play? How can we expect people to know how to ask about using life insurance as an executive bonus as an alternative or addition to a traditional retirement plan?

Advisors – look outside hard-sell promotions on social media, address the crux of life insurance as it pertains to life planning (not just to pay a death benefit) and stay active in the industry’s digital community. It’s important to consider what people may not know about life insurance. It’s even more important to consider what their impression of life insurance already is and why.

Life insurance carriers have made remarkable efforts on surveying consumers and responding to the data revealed in those surveys. The industry understands we are in an "information sharing age" and has developed tools both for you to use with clients as well as for clients to access on their own.

By using some of these tools with clients or educating clients on how to access and use them, you can help clients to overcome any negative portrayal of life insurance products in the media.

Interactive Tools Advisors Should Use With Clients

- Insurance need calculators. There are calculators you can use with clients and calculators clients can access themselves. These allow people to see for themselves exactly what factors into the amount of life insurance coverage that they need. They also allow you to input client specifics to calculate the coverage amount needed.

- Estate/retirement analysis. More comprehensive calculations and reports are available for people concerned with the way their estates or the assets from which they intend to draw retirement income will be taxed. Lincoln Financial offers a great tool that allows you to input the specifics of your client’s income, existing estate plans and assets, and then calculates the potential tax vulnerabilities of their current plan. The analysis then goes a step further to show how incorporating life insurance provides a tax shelter where the client may need it most.

- Long-term care visualizer. This is another tool that allows clients to input their specifics It shows in real time what costs they may be responsible for should they incur a need for long-term care. The visualizer also shows how life products with linked benefits for long-term care can ease the burden of rising care costs.

Source: Alexa Hofmann is life brokerage sales consultant for The Stamm Agency