As younger generations enter the workforce, counselors should look to Millennials and Gen Z, especially those with career potential of $ 100,000 or more, as sales goals. promising. Understanding the needs of your client, regardless of age, is the first step in starting a conversation about the benefits of income protection. It is a common misconception that Individual Disability Insurance (IDI) is only valid for professionals who are more advanced in their careers.
Understanding the next generation of IDI buyers Everyone has their own income protection needs. Millennials and Gen Z have unique characteristics that impact their approach to insurance and disability. Millennials are those born roughly between 1980 and 1996, including recent college graduates as well as established career people. Millennials are now going through some of their major life stages for the first time: getting married, buying a home and, for some, entering the workforce.
By comparison, Gen Z is the generation born between 1996 and 2010, with some graduating from college and entering the workforce the next year. Sometimes referred to as “digital natives” or “centennials,” Generation Z is the first generation not to know what life was like before the Internet. As such, they are extremely tech-savvy and often seek careers that match their skills and earning potential.
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Many young professionals have already made significant investments in their future and are pursuing well-paying careers that can help them leave their homes, pay off large student loan debts and build a sizable nest egg. What these age groups may not know is that protecting their future income is essential to ensure that they can meet their financial goals in the event of a disability.
As millennials enter the workforce and Gen Z joins them, it’s important to educate both generations about the importance of IDI. The following reasons show why Gen Z and Millennials can benefit from income protection policies early in their careers.
IDI can help millennials and millennials protect their income
All generations share the conviction that it is important to save money. Younger generations as well as older groups should seek to protect their future in a number of ways, including protecting their income – and their ability to save – through the IDI. While Gen Y and Gen Z are at their peak of purchasing an IDI font, older generations like Gen X also have the option of purchasing fonts.
See this as a valuable selling point for those who appreciate having a long-term financial plan to prepare for the future. After all, it makes sense to buy an income protection plan before disability, rather than after.
IDI offers unique features for millennials and millennials Since many millennials and millennials are about to start their careers, they need to consider the characteristics of policies that may change as their needs change. The following are strong policy elements that young professionals should look for in an income protection policy:
- Opportunities to increase coverage. Endorsements that increase monthly benefits to keep pace with salary increases are a must for early career professionals. Some increase riders provide for annual increases in benefits by a specified percentage per year for a specified period of years. IDI policies with features to increase coverage in the future can protect a person’s growing income, helping to ensure adequate coverage in the event of disability.
- Strong definition of disability. For many professions, a strong definition of disability can help employees protect their income in the event of disability. For specialist professions, such as litigators and some physicians, the ability to choose a profession rider may protect them if they encounter a disability that prevents them from doing their current job but allows them to do related work. Remind young clients that career paths are long and that purchasing a policy with a professional rider is a smart financial decision that takes into account the unforeseen and offers coverage and flexibility for the future.
- Student loan riders. The costs of student loans for Millennials and Gen Z can be stressful, and becoming disabled can prevent potential high earners from paying off their student loans. Fortunately, if a client suffers from a total disability, a student loan rider can cover some or all of the student loan payments, up to a maximum period. This feature of the policy is particularly relevant to Gen Z and younger Millennial clients who may have significant student debt.
Younger clients have emerging families to protect Many millennials and Gen Zers will soon be going through a host of family milestones, including having children and caring for aging parents. As younger generations look to the future, they should consider the possibility of future family obligations (whether caring for a parent, spouse or child) and how ‘IDI can help them prepare.
Some IDI plans can provide the valuable income protection needed if an employee has to take time off work to care for a family member with serious illness or injury. For example, some policies allow workers to take time off to act as family caregivers and obtain coverage for lost income. Let your customers know that buying an IDI policy early can help them support loved ones when they need it most.
The next generation of IDI policy owners
By providing valuable income protection, unique features and more, IDI can help Millennials and Gen Z get their careers, families, and lives on the right track. As an advisor, your sound financial advice can help provide the next generation of high-income professionals with the tools they need to make the right income protection decision based on their unique needs. In return, you will have the benefit of increasing your sales pool by exposing a new population of future employees to the value of the IDI.
Chris Coy is Regional Director of The Standard. Chris is working with producers and general agents across the country to identify fully underwritten and guaranteed individual disability insurance sales opportunities. He works to educate the distribution industry about technological advancements, subscription and sales programs that make IDI easier to buy and faster to issue. Chris holds a bachelor’s degree from Portland State University, received his CLU and ChFC designations from American College, and holds an L&H bachelor’s degree in Oregon. He can be contacted at [email protected].