An era of “personal responsibility” ushered in by the Affordable Care Act, as well as a packed and overlooked population base, make millennials ideal clients for disability insurance policies in the coming years, says Disability Resource Group, Inc. President John Nichols.
Millennials—those between the ages of 18 and 35—may not seem like a rich client base for
producers selling disability insurance. After all, millennials are notoriously tech-addicted and skeptical of insurance products, not to mention agents and brokers.
However, Nichols said a few simple things make the nation’s 85mn to 90mn young people prime candidates for his brokerage.
“I am focused on this demographic because one, it’s extremely large; two, it’s overlooked; and three, the need is greater than ever before,” Nichols told Insurance Business. “Why is the need greater? Because the environment has changed to one of personal responsibility.”
Nichols said the Affordable Care Act is the primary reason for this new environment, in which individuals are increasingly responsible for choosing and funding their own insurance needs. The shift to personal responsibility, starting with 401Ks in favor of pension plans, has only been exacerbated by the ACA.
Nichols said he believes that due to increasing costs,
employee-offered benefits will eventually trickle down to a small stipend for healthcare services.
“This trend is more accentuated than ever, ever before,” Nichols said. “You as the employee are responsible for making donations. We’re giving you a little bit of money and you get to choose what benefits you want.”
Because millennials are also known for job hopping, a disability plan that follows an individual throughout their career is even more ideal. However, shaping the message is going to be key to getting this demographic’s business.
“One of the first things I try to do is educate them,” Nichols said. “What I might say is, ‘Do me a favor and do a little bit of research on what benefits you have at work right now.’ Then I try to help them realize their own net worth in terms of their talents and skills.”
Nichols said he does this by walking millennials through their current income and their likely income for the next 30 years. By representing their future self as one worth millions of dollars, the conversation becomes one about protecting their dreams and goals.
“It may sound a little corny, but it’s really about people trying to visualize their future,” he said. “You’re just starting out in your career, but I also want you to understand what you can accomplish in your life. And then, ultimately, disability insurance is all about protecting your capabilities.”
Nichols knows millennials don’t make their decisions by “talking to people like me,” but it’s one way to get the conversation going. After searching out the options themselves, they may come back to a producer in the end.
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