As the U.S. largest, most diverse generation - representing approximately 25 percent of the population, according to government estimates - millennials are the movers and shakers of modern society. Businesses are interested in what appeals to them as a means to earn their patronage, and employers are on the recruitment front, hoping to shore up their staff levels with young talent.
Here's another way millennials are shaking things up: how they're buying life insurance. Twenty to 30 years ago, life insurance was typically purchased in what was then the traditional route - contacting a provider directly or consulting with an agent. While both these methods are still pursued, of course, the internet is now the preferred form of buying among millennials, a new poll revealed.
Nearly 7 in 10 millennials first go online for life insurance
"Millennials who purchase life insurance usually consult the internet before an advisor."
Close to 70 percent of 18- to 35-year-olds usually shop for life insurance online before advising with an agent or financial advisor, according to a new survey conducted by quote comparison firm LifeAnt.
Interestingly, the internet was nowhere near as big of a preference for older generations. Among members of Generation X - most of whom are in their 40s and 50s - 60 percent said they would just as soon turn to an agent or advisor for life insurance purchase information before going the online route.
Given that millennials outnumber baby boomers by 83 million to 75 million, based on analysis from the U.S. Census Bureau, these findings may suggest that agents have a smaller pool of clientele to choose from. In reality, it simply means that agents have to adapt, the study concluded. Advisors who don't risk being left behind.
Baby boomers overwhelmingly prefer financial expertise from professionals
Growing up in the internet era may account for why millennials often choose online resources over professional assistance. However, as they grow older and wiser, millennials may see things differently. Most baby boomers, for example, opt for advice from the experts when it comes to financial security. Nearly 65 percent of men and women from the baby boomer generation prefers face-to-face meetings with financial professionals for advice on affording retirement living, according to a separate poll from the Insured Retirement Institute.
While a basic life insurance policy may be available to buyers in an online setting, something that's relatively new in the insurance world's history, there's nothing new about life insurance premium financing, a purchasing option that can make sense for high net worth individuals. When clients have dependents who rely on them financially, making life insurance an important product, life insurance premium financing may be a worthwhile strategy for clients whose financial resources are finite. In other words, they may have a high net worth, but their assets are tied up into other financial considerations.
"At 5 million, millennials represent a considerable portion of the U.S.' millionaires."
Life insurance premium financing requires agents' expertise
Life insurance premium financing - where current or future policyholders borrow money from a third party to pay for premiums - can be a smart move for clients. However, it does come with risk, which is why agents serve as a key cog in helping high net worth individuals make the most of their investment. Even though millennials may be the youngest members of the workforce, many have already made their first million. According to a recent study from the Shullman Research Center, there are 5 million Americans between 18 and 35 years old who earn a seven-figure annual salary, CNBC reported, outnumbering Generation X millionaires at 4 million.
For more information on how you can include life insurance premium financing into your book of product offerings, speak with a GFD Financial Services Manager today.