As an insurance agent or financial planner, your target customer audiences likely to consist of three generational cohorts, Boomers, Gen X, and Millennials. While these groups share the critical need to protect income during an illness or injury, the motivations of each group differ widely. The good news is that carriers offer benefits designed to address the concerns facing each age group.
The youngest Baby Boomers are 54 years old, in their prime earning years, and preparing for retirement. Children are usually on their own by this time. Education expenses are behind them. It’s the time to maximize contributions to retirement accounts and take advantage of catch-up provisions. Individual disability insurance is attractive to this age group because an employer sponsored plan may have a maximum monthly benefit that means the benefit for someone highly compensated is less than the 60 percent of income. The average disability claim lasts almost three years. It is nearly impossible at this age to make up, prior to retirement, for the financial loss due to interruption in income. This age group may have additional interest in a disability plan that replaces the contributions to a retirement account.
The next age group is clients in the age group of 41 to 53. These are the Gen Xers. Compensation levels are still rising, future job changes are more likely, and they may be dealing with children and aging parents, the new sandwich generation. Many employers, especially those employing less than 500, do not offer long-term disability insurance. Without the assurance of an individual disability insurance, leaving an employer who offers disability benefits for one that doesn’t, presents an added risk. Because salaries are likely to accelerate for forty-somethings, this age group may be particularly interested in a disability plan with inflation protection and a plan that provides protection for caregivers whose family obligations result in reduced working hours.
Recent grads to those just turning 40, are the third working group with a need for disability insurance. Challenges and financial concerns of this group cluster around income growth and student debt repayment. Making disability insurance affordable is always important, even more so for this group of people, who struggled to start or grow their careers during the Great Recession. A disability plan with the option to later purchase additional levels of coverage meets the affordability issue of today while anticipating future earnings increases of tomorrow. Student debt is the albatross around the neck of this generation. Carriers have responded to this financial stressor by adding an optional benefit that will continue established student loan repayments if an injury or illness sidelines a paycheck.
DIS knows the disability insurance market and is able to recommend carriers and benefits that address the unique financial position of your client. Call us today for a quote or to learn more about any of these optional benefits.