Why do people buy life insurance?
Everyone generally has a specific reason for buying life insurance: to cover expenses for their spouses, to leave money for loved ones for a funeral, to leave money for their children—all in the event of their death. Some purchase when they’re young, like in their 20s, and others don’t see a need for it until they’re much older. And some never purchase it at all.
Though 86% of people say they would recommend life insurance to others, only 60% actually own it. You’ve likely heard every situation in the book for why or why not to purchase life insurance as an agent. So, what does your life insurance policyholder makeup look like? Fifty-fifty younger vs. older people purchasing? More older?
Let’s take a look at who is buying life insurance as a whole in the United States.
Life Insurance Buyer Demographics
Like we said, about 60% of people in one survey from 2016 said they own life insurance. Other surveys or studies over the years have reported numbers like 57% and 62%. So, the total amount of people owning life insurance hasn’t seemed to fluctuate much over the last few years. However, let’s dive deeper into who is buying it.
44% of people ages 18-29 own life insurance whereas 65% of 65+ year-olds own it, so there’s quite a large gap there.
What’s more: 37% of parents with children under 18 have no life coverage at all, likely leaving the family in a financial hardship in the event of a death.
How much coverage do these people own? Bankrate reports the following numbers:
As an agent, it’s your job to help individuals and families better understand the amount of coverage they need. As you might be thinking, these coverage amounts are considered somewhat low.
Why? Well, this article points to the increase in sales of variable annuities as opposed to traditional life insurance. After all, if you can sell to wealthier people, of course you’re going to. But, this also lends opportunity to agents who can sell to “moderate-income” consumers who really need traditional life insurance coverage.
They also point out that the lower coverage amounts could be due to employer benefit trends. More employers are now offering less life insurance benefit as part of employer-paid benefits. And when the group benefit life insurance is offered as a voluntary benefit, sometimes the coverage amounts only go so high, so coverage bought there is naturally lower as well.
Selling Life Insurance to Millennials
So, what can you take from all of this? As an agent, you have an opportunity. Whether you’re a financial advisor who sells life insurance or a health and life agent, now is the time to reach out to the younger demographic who doesn’t yet understand the need for life insurance.
All it takes is one meeting to go over your potential client’s assets, debts (student loans!) or general concerns for their family in the event of their death to help them see the importance (especially when a lot of millennials see saving for a vacation or paying for monthly expenses as more important). The good news it that even in the midst of enormous technology, 51% of people would still prefer to meet an agent in person to discuss the logistics of coverage.
Plus, 40% of millennials show interest in a life/long-term care coverage combination—that’s a large group of people to go after. That’s potentially 30 million people, in fact (there are currently over 75 million millennials in the US).
How to Reach Them
The first place you should start looking for these millennials is within your current database: do any of your current clients have children of this age? Are any of your millennial clients likely to refer others? Where did you gain these millennial clients in the first place (you’ll need to be tracking lead source to figure this out)?
Next, consider advertising on channels where millennials are likely to be like Google and Facebook. 90% of millennials are online every day, and 55% use search engines like Google to learn about products or services. And don’t forget to make sure your website is mobile-friendly, because 75% of millennials go online via a smartphone just as much as they do on a desktop computer.