Where FIs Fit In The Millennial Life Insurance Purchase Journey

Where FIs Fit In The Millennial Life Insurance Purchase Journey

May 28, 2021 at 09:00AM

Life insurance is one of those financial products that often gets careful consideration during the milestones of life — marriage, perhaps, or kids arriving. The pandemic may have shifted thinking a bit, as consumers consider health, safety and the financial wellness of loved ones should the unspeakable happen.

Franklin Madison Group Vice President of Operations Kim Arvizu told PYMNTS there are generational differences in how younger and older consumers approach researching, choosing and buying life insurance products. Broadly speaking, the PYMNTS Life Insurance Engagement Report found seniors and baby boomers are least likely to seek information on life insurance products. By way of contrast, younger consumers, such as millennials and Generation Z, are showing the most interest in learning about what life insurance can do for them.

The increased likelihood of the younger groups to explore information about life insurance may be due in part to the overwhelming majority of Gen Z consumers (73 percent) facing student loan debt with an average repayment period of 20 years. Some of these loans could be passed to loved ones if not paid in full prior to death. Millennials, like Gen Z, also have practical reasons for their interest in life insurance policies. PYMNTS research shows millennials and bridge millennials, who are likely to have very young to nearly teenaged children, are the most motivated of all generations aside from Gen Z to seek out an insurance policy to protect their loved ones.

All of this spells opportunity for financial institutions (FIs) that take a tailored, proactive approach to engaging with different generations — leveraging tried and true, traditional, paper-based methods, yes, but also digital vehicles such as social media and personalized online demos.

Arvizu noted surveys show 38 percent of consumers think life insurance should be more affordable, and 30 percent believe the purchasing process should be easier. The truth is the cost of life insurance is lower than many might think — and gaining access to the right insurance is easier than many might think, with convenient monthly, quarterly and annual premium options.

“Education is one major factor, and consumers are seeking out different ways to educate themselves on life insurance,” she said.

Drilling down into just how different cohorts want to gain insight and education, she said Franklin Madison has been focusing on millennials. Those younger consumers, she said, are (no surprise) looking online.

“But they’re also talking to friends and family and want to talk to a financial advisor at some point,” she said. “So, there are multiple touch points. However, the process is not as cumbersome as it used to be.”

Gone are the days when consumers were inundated with multiple life insurance offers in the mail, laden with pages of “fine print.” Now, simplicity is key, she said, and an omnichannel approach through direct mail and digital channels is an effective strategy. That approach can address generational preferences of those people who want to look online versus those people who want something to review in hand. And it’s important, no matter who is offering the life insurance — Franklin Madison, as marketers, or FIs — that customers can get answers to their questions.

Customizing The Offers

Customizing life insurance offers can be done through segmenting data, and self-service demos can help individuals and families consider (or re-consider) their financial priorities based on different scenarios. And, she added, the combination of the InsurTech industry and the number of providers is giving rise to new, affordable coverage options.

Gone, too, are the days when we bought life insurance only at major milestones like having children. That’s traditionally been a trigger, she said, but a significant number of younger people are more interested in their financial security “and life insurance is an important piece of that.”

As she told PYMNTS, combining technology, advanced analytics and the right amount of education for people to make informed decisions can make life insurance “simpler and easier for consumers to consider and purchase as part of their overall financial plan.”