Engaging Millennials and Gen Z: the life insurance conversation advisors must start

This article was provided by Co-operators.

The financial services landscape is evolving rapidly and shifting consumer behaviours. For life insurance advisors, this evolution underscores the importance of adapting to the distinct needs of Millennials and Generation Z.

Younger, digitally savvy generations prioritize flexibility, customization, and transparency in their financial decisions. However, despite their technological prowess and economic awareness, many Millennials and Gen Z individuals still overlook the crucial role of life insurance. Co-operators believes this presents a significant opportunity for advisors to connect with these cohorts and provide valuable advice.

To effectively bridge this generational gap, advisors must understand Millennials and Gen Z’s unique values and priorities and articulate how life insurance aligns with their broader financial goals. The lasting effects of the COVID-19 pandemic have profoundly influenced how they approach financial planning.

While the need for life insurance has surged across all demographics, Millennials and Gen Z stand out for having the highest unmet demand, even though their ownership rates are similar to those of Baby Boomers. Co-operators recognizes the generational “life insurance gap” as a pivotal opportunity for life insurance advisors to provide meaningful advice, tailored to the unique values of these younger cohorts.

The generational life insurance gap

This generational 'life insurance gap' is a critical opportunity for advisors. According to LIMRA, 44% of Gen Z and 34% of Millennials report needing or needing more life insurance coverage.

Co-operators believes the reasons for this gap are twofold.

• First, these younger generations are reaching key life milestones that act as trigger points for life insurance purchases—such as getting married, buying a home, or having children—much later than their predecessors.
• Second, the rising cost of living has forced them to prioritize other financial obligations, often at the expense of securing life insurance.

Additionally, there needs to be more awareness about the cost of life insurance. A recent study found that over a third of Canadians estimate the cost of life insurance to be three times higher than it is. This overestimation is a significant barrier to purchasing life insurance, particularly for younger people juggling multiple financial priorities.

The essential role advisors play in closing the gap

Life insurance advisors have a unique opportunity to make a difference in the lives of Millennials and Gen Z. While these younger generations are often financially savvy, they frequently overlook the importance of life insurance—one of the most critical elements in a comprehensive financial plan.

Building trust is the foundation of an advisor-client relationship, especially when addressing something as personal as life insurance. Advisors can start by adopting a supportive and empathetic approach, taking the time to understand their specific concerns and financial goals. Many younger clients hold misconceptions about life insurance—such as its cost or relevance to their lives at this stage. By dispelling these myths, it’ll help them see the value of starting early, not just to secure affordable coverage but to guarantee their insurability for the future.

Advisors also have an opportunity to guide Millennials and Gen Zs through the complexities of life insurance and help them understand the role it plays in building a more secure financial future. Engaging Millennials and Gen Z in meaningful discussions about life insurance can be most effective when tied to significant life milestones, as they’ve traditionally acted as trigger points for purchasing coverage.

Tailored conversation starters

When addressing key life milestones with younger clients, advisors can consider the following conversation starters to guide their discussions:

Purchasing their first home

• "Congratulations on purchasing your new home! Now that you've made this significant investment, let's discuss how to protect it long-term."
• "I understand you might feel financially stretched after such a big purchase, but life insurance can be more affordable than you think. Let's explore your options."

Expecting their first child

• "As you prepare for this exciting new chapter, it's important to consider securing your child's future and ensuring your family's financial stability. This includes planning their education and setting up a safety net for the unexpected."
• "Term life insurance is a great option for new parents—offering coverage at a lower cost. With Co-operators' Versatile Term products recently dropping in price by 3% to 7%, now is the perfect time to secure coverage that fits your growing family's needs."

Why start the conversation now?

Co-operators believes it’s critical for advisors to start the conversation about life insurance with Millennials and Gen Z clients sooner rather than later. Not only does it help them secure better rates, but it also positions advisors as a trusted resource who care about their well-being. As the financial landscape continues to evolve, the role an advisor plays in guiding younger generations through financial decisions becomes increasingly valuable.

Remember, while technology and robo-advisors have their place, they cannot replace the human elements of empathy, understanding, and personalized advice. By starting the conversation today, advisors can help build a secure financial future for the next generations.

Learn more about how Co-operators supports life insurance advisors here.

Versatile Term™ is offered by Co-operators Life Insurance Company. Life and health insurance products are underwritten by Co-operators Life Insurance Company. www.cooperators.ca. 1-800-454-8061. Individual circumstances may vary. You may wish to contact the licensed insurer’s representative or a licensed insurance agent if you need advice about your insurance needs. Co-operators Life Insurance Company is committed to protecting the privacy, confidentiality, accuracy and security of the personal information that we collect, use, retain and disclose in the course of conducting our business. Please refer to our privacy policy for more information. Versatile Term^TM is a trademark of Co-operators Life Insurance Company. ©2024 Co-operators Life Insurance Company.