Even when nothing’s biting, fishing can be a fun and relaxing activity. We get a chance to be outdoors, and if we go with someone else, the time spent together can be enjoyable. Still, “catching…a bunch of fish,” as Outdoors Weekly points out, “is the main reason that we go fishing.” And to accomplish this goal, we need to find hungry fish. Here’s some advice the magazine provides in a recent article:
To consistently catch fish, we first need to find them. However, at times just finding the fish isn’t enough. You’ve got to find the fish that are willing to eat your bait.
Couldn’t the same advice apply to insurance agents? If we want to make a sale, we need to find qualified prospects who are willing to listen to our sales pitch. Put another way, we need to find people 1) who need the solution we’re selling and 2) who actually recognize that need.
For agents who sell life insurance, millennials—people born between 1981 and 1996 according to the Pew Research Center—certainly meet the first requirement: Forbes reports that only about 10% of people age 25-40 “say they have enough life insurance in place to cover self-reported needs should they die,” so there is definitely a need. And now, thanks in part to COVID, many of these young people are finally thinking about life insurance; at long last, they’re willing to listen.
In an article entitled “7 reasons you may need life insurance, even if you think you don't,” Business Insider provides a good summary of why it might be a good idea for a young person to purchase life insurance. Here’s a quick summary:
People depend on your income: If you are engaged or recently married, if you are expecting or want to have a baby, or if you have aging parents who you support financially, those are all good reasons to purchase life insurance. When your loved ones depend on your income, life insurance can help ensure that they “can maintain a similar standard of living if you die prematurely.”
You have debt or work for yourself: While these seem unrelated, both situations create a need for life insurance. As Business Insider explains, “financial experts recommend including your total debt amounts to ensure whoever receives the money in the event of your death will have enough to pay off your outstanding balances in full,” and they point out that the largest debt most people have is a mortgage. Similarly, for a business owner, a life insurance policy can be used as collateral to secure a small business loan, and “the death benefit on your policy will go toward paying off the entirety of the loan in the event of your death.”
You have a high-risk occupation or lifestyle: Whether you have a high-risk job or extreme hobbies, you probably need life insurance. While the premium might be higher to compensate the insurance company for the extra risk, “the cost is worth it considering the likelihood” that you could “die from unnatural causes.”
The Business Insider article makes one final point that’s worth explaining to your Millennial clients: “There are several factors that determine the cost of life insurance, but generally, the younger and healthier you are when you buy a policy, the cheaper it will be,” and the cost for an “average 20-something or 30-something nonsmoker” may be between $10 and $50 per month for a term life policy.
That’s pretty affordable, so for many people cost will not be a factor.
COVID has changed the way people think about their priorities, and millennials are no exception. According to a January 27 article in Business Insurance Magazine, “millennials’ thoughts have wandered a variety of places during the pandemic, even to thinking about life insurance.” The article cites a survey by Greenwald Research which finds “eight in 10 millennials believe ‘people like me’ need life insurance,” but it also points out that most millennials do not know how much life insurance they need, and only about a quarter of people in this age group “ have set aside savings or created an emergency fund.”
There are a couple of lessons here:
If you’re not currently offering life insurance to your clients, now would be a good time to add it to your product portfolio. Remember, your clients are going to listen to your advice, so if you tell them they need life insurance, they’re very likely to buy.
Just as important, though, is this the fact that if you don’t recommend life insurance, they may go without it. You’re their agent, so they’re depending on you to tell them what they need. Just imagine how you would feel if a client passed away without life insurance when you could have recommended it to them. You certainly don’t want a client’s family members setting up a GoFundMe to cover the funeral costs for their loved one.
So which is best for millennials—term life or whole life? Why not both? A combination of term life and whole life insurance can address both short- and long-term protection needs for your clients without undue financial strain on their cash flow. Term life is very inexpensive, especially for young adults, while whole life will help them build cash value and provide protection as they get older and term life is more costly.
Be sure to check out the AHCP Carriers Page to learn about the life insurance solutions we can help you with, and let us know if you have any questions.