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Income Protection: Essential Coverage for Millennials

Posted by Dan Steenerson on Tue, Apr 12, 2016 @ 15:04 PM

income-protectionIncome protection may be the greatest insurance need of Millennials. That’s because as a group, millennials are burdened with debt, primarily from student loans. A Facebook study, “Millennials + Money: The Unfiltered Journey” indicates that for almost half, paying down that debt is the most important financial goal.

Millennials are establishing careers in an economy where fewer employers offer disability insurance as an employee benefit. Compared to the Baby Boomer generation at the same age, fewer millennials own houses, vehicles or are married. Therefore, life insurance and personal lines insurance needs may take a backseat to the importance of income protection.

Here’s one more reason to consider disability insurance as the foundation of a professional relationship with a millennial. Many say saving for retirement is the second most important financial goal. Although financial assets may be relatively small now, millennials are on the road to affluence. More than 47% have a postsecondary degree, predicting a higher income level potential. They need or will soon need financial planning advice. Advisors who invest time and interest in this group now will be a step ahead of the financial professionals who hope to attract new clients, a few years from now, when personal assets grow to a more attractive level.

Four easy steps

Get to know the individual: Take the time to learn about financial goals and concerns. What keeps them up at night? What insurance coverages do they already have? Are they working with other financial professionals? Developing this personal relationship is important; this generation can be mistrustful of financial professionals. But at the same time, they know they need financial guidance but are unsure where to find it. While your expertise is important, focusing on their needs is essential to building a relationship. Although an in-person meeting is always best, be prepared to collect this information digitally. This prospect may prefer that preliminary information be gathered before your initial meeting.

Explain the need for income protection: Explain why paycheck protection is so important at this stage in life. The significant amount of student loan repayment in the monthly budget is one factor, another is that the typical millennial may frequently change employers. The new employer benefit package may not include disability insurance. If disability insurance is an employee benefit, eligibility and waiting periods. Either situation may leave the client uninsured for a time. With millennials marrying and acquiring assets later, other forms of financial protection may be appropriately delayed.

Simplify the product selection: Get to the heart of the need quickly. How much income protection do they need? How long will their financial resources allow them to go without income? How long would they want to rely on the benefit? How do they feel about underwriting requirements? Is the client open to the full gamut of medial underwriting or is a guaranteed issued product a better fit? And finally, what can they afford?

Work with a DI expert: Armed with what you learned from the information gathered and the answers to these questions, you have just about everything a disability income specialist needs for case design, product selection, and to prepare quotes to present to the client.

The result: an established relationship

Your new client relationship is one built on trust and understanding – which are must-haves for the millennial audience. Provide empowering information about personal finance topics, budgeting, retirement savings goals and other topics along the way. Millennials may be wary of approaching financial professionals but they are also aware that they need help. The motivation for financial security is there. The motivation to work with a financial professional often isn’t. Use income protection insurance and these four easy steps to start a comfortable dialogue with a new millennial client.

Remember to call DIS for product education, marketing and sales ideas, and quotes. We’re here when you need us.  Need a nice millennial client handout?  Share this infographic.

Topics: income protection and millennials