Discussing the Rising Costs of Long-Term Care with Clients

Long-Term CareNovember is Long-Term Care Insurance Awareness Month. Like other “Awareness Month” campaigns (Life Insurance in September and Annuities in June), this is a great opportunity to discuss how LTC coverage can fit within your clients’ and prospects’ retirement portfolios.

The conversation about long-term care can be difficult. Many people have yet to consider the impact it can have on their retirement. Others simply don’t want to think about or accept the fact that a time may come when they can no longer live independently.

Longer life expectancies have seen the need for long-term care increase over recent years. And as the need for LTC grows, so too do the costs. The expenses associated with long-term care are staggering. Without proper planning, those costs can quickly drain one’s retirement income, leaving family members to shoulder the financial, emotional, and physical burden of providing and paying for care.

Rising Health Care Costs

Looking at Genworth’s 2018 Cost of Care Survey, the annual national median for various types of care and services are as follows:

  • Adult Day Health Care – $18,720
  • Assisted Living Facility – $48,000
  • Homemaker Services – $48,048
  • Home Health Aide – $50,336
  • Nursing Home Care (Semi-Private Room) – $89,297
  • Nursing Home Care (Private Room) – $100,375

These numbers are only estimated to rise, with Genworth estimating that in 2028 (just ten years from now) the annual national median for nursing home care in a semi-private room increasing to $120,008.

When you consider that the average amount families age 56-61 have saved for retirement is $163,557, you can see how a long-term care condition, even a short one, can take a huge bite out of a consumer’s retirement portfolio. And that’s just the average. When we look at the median, the numbers are more concerning – just $8,000 for those aged 50 to 55 and $17,000 for those aged 56 to 61.

Legacy Financial Partners strongly encourages agents and advisors to use the rest of November to have LTC conversations with prospects and clients. To help, we have created an exclusive LTCI Sales kit that includes:

  • LTCI Pre-Approach Letters
  • Key Long-Term Care Statistics
  • LTCI Client Presentations
  • LCTI Concept Sheets
  • True Cost of LTC Guide

Fill out the form or call 1.877.614.0141 to request your complimentary copy.

 

Think Small, Market Big: Small Business Saturday Tips for Advisors

This is the time of year when most entrepreneurs are fully engaged in holiday marketing activities. The next few weeks will see businesses hitching themselves onto the Black Friday, Cyber Monday, and other year-end sales wagons. However, there is another, often-overlooked event coming up that is also worthy of your attention – Small Business Saturday.

The locally-focused alternative to Black Friday, Small Business Saturday is an annual event held on the Saturday after Thanksgiving as a way to encourage people to patronize businesses in their own communities. The main goal of SBS is to get holiday shoppers to spend money with local retailers. However, there are ways for small agencies and independent advisors to take advantage of Small Business Saturday as well.

Small Business Saturday Marketing Tips

During the weeks leading up to Small Business Saturday, reach out to a few local businesses about cross-promotional opportunities, such as:

  • Hand out each other’s promotional items (business cards, branded “swag,” fliers, etc.) to your respective clients and customers.
  • Share each other’s social media posts and pages. Relevant hashtags include #ShopSmall and #SmallBizSat.

Those partnerships don’t need to be limited to local retailers. Locally-owned establishments, service providers, and other non-retail businesses often get in on the Small Business Saturday action.

  • Gyms/fitness centers
  • Cafes and coffee shops
  • Home improvement and remodeling contractors
  • Auto repair shops

local business ownerConnect With Your Community

In some cities, especially those with vibrant shopping districts/centers, Small Business Saturday can be a community-wide event. Hosting, or simply showing up to one of these events in your area is a great way to mingle with the crowd and introduce yourself to a variety of new leads. Make sure to bring plenty of swag to pass out and/or offer incentives to anyone willing to join your email list.

Think of the resources you invest into Small Business Saturday as lead gen activity. For instance, your presence shows other area business owners that you have a vested interest in the community as a whole. This can go a long way toward building solid B2B relationships. Contact your local Chamber of Commerce to see how you can get involved.

Looking for more Small Business Saturday ideas? Our Guerrilla Marketing Tactics for Advisors & Agents guide was created exclusively for financial professionals who are looking for unique and creative additions to their marketing toolkit.

 

How Advisors Can Leverage The Thanksgiving Holiday

November is here and with it comes the “unofficial” beginning of the holiday season. By the time you’ve finished reading this, most stores will have moved their Halloween stock to the bargain bin, bringing out any Christmas inventory that isn’t already on display. Yes, the holiday shopping blitz is underway and consumers are reacting with the typical “Uhggg, Christmas decorations already? I’ve barely started thinking about Thanksgiving!” And this is exactly why agents and advisors should be thinking about Thanksgiving.

Maybe it’s the sentiment surrounding the occasion. Or the lively, yet still-lighthearted stroll we take during the weeks before the rush that kicks off on Black Friday. Whatever the reason, there is something about Thanksgiving that presents a golden opportunity to interact, engage, and foster relationships. The overall goal of a Thanksgiving marketing campaign is more about showing appreciation than sealing a deal. You can achieve this by setting aside the sales pitches in favor of soft, subtle touches that tap into the traditional spirit of food, family, and friends. Here are a few ideas to try out over the coming weeks.

Thanksgiving“30 Days of Thanks” Social Media Campaign

This is a simple, low-to-no-cost way to boost your social media presence and show a little personality to your audience. Spend a few minutes each day thinking of something that you are personally thankful for and share the sentiment across your social networks. Encourage your followers to reply with their own expressions of gratitude and use relevant hashtags (listed below) for improved organic reach.

  • #ThankfulEveryday
  • #GivingThanks
  • #30DaysOfThanks
  • #CountYourBlessings
  • #Gratitude

A straight month of social media content can be a little taxing, so try switching gears from funny one day to heartfelt the next. Just make sure to keep things simple, genuine, and—most importantly—positive. And do your best to remain consistent throughout the entire month. Feel free to pull from the example below to get things started:

“Day One of #30DaysOfThanks – I am #ThankfulEveryday for the continued support of my #family and #friends who have stood beside me through the good times and bad times. To them, I say #ThankYou. What are you most #Thankful for this holiday season?

Thanksgiving DinnerThanksgiving Giveaways and Gifts

Raffles and giveaways are extremely popular during the holidays, especially when the offer involves food. Depending on your specific goal, there are a few different ways to approach a Thanksgiving giveaway.

If you simply want to give your clients a small token of appreciation, send them a gift card for a local grocery store, bakery or winery. Advisors with large client rosters can randomly select one or two to receive a free turkey or gift certificate to a local restaurant. Or consider the incentive-based approach and offer to your clients a raffle ticket for referrals, sharing your Facebook page, or scheduling an appointment for a policy review.

For prospecting and lead generation, a heavily promoted Thanksgiving contest can be a good way to draw new people into your pipeline. Whatever direction you decide to go, make sure you stay within the boundaries set by state and federal giveaway regulations.

Recipes and Holiday Cooking Tips

Do you have an old family recipe that’s too good to keep to yourself? Maybe you know the secret for the perfect turkey or have a few quick and simple appetizer ideas. Online searches for recipes and menu ideas skyrocket during November. Offering your own culinary tips, tricks, and techniques can be a great way to latch onto one of the top trending searches of the month, so you’ll definitely want to include these in a blog post and share liberally on your social media pages. Your monthly newsletter, email blasts, and direct mailers are also good delivery methods to consider. This is a subtle, yet effective form of content marketing that can not only help with brand awareness but make you come across as more personable to clients and prospects.

**

Legacy Financial Partners is thankful for YOU. Request our free 2018 Off-Holiday Marketing guide which provides tips for year-round engagement with prospects and clients.

 

What Your Clients Need To Know About The 2019 Social Security COLA Boost

Social Security CardFour months after the ominous Board of Trustees report that brought concerns of insolvency to the forefront, Social Security is back in the news.

Starting January 1, 2019, the largest Cost-Of-Living Adjustment since 2012 will go into effect. The 2.8% bump will increase the estimated average monthly benefits for all retired workers from $1,422 to $1,461. The maximum monthly benefits a worker who retires at full retirement age (currently set at age 66 for anyone born between 1943 – 1954) will go up from $2,788 to $2,861. Couples who are both receiving benefits will get an estimated average of $2,448 per month, up from last year’s $2,381 average.

Changes to yearly earning limits and reductions include:

  • A $1 reduction for every $2 earned about the new annual limit of $17,640 for those who claim benefits between age 62 and full retirement age. The annual limit before the 2019 COLA adjustment was $17,040.
  • A $1 reduction for every $3 earned about the new annual limit of $46.920 for the year in which the beneficiary reaches full retirement age.

Historically, the Social Security Administration only counts earnings before the month an individual reaches full retirement age. When they do, their benefits will no longer be reduced regardless of how much they earn per year. This will remain unchanged when the COLA increase goes into effect.

Additional Social Security Changes

Along with the increased benefits, the SSA has also upped the maximum amount of earning that are subject to FICA tax from $128,000 to $132,900. As a result, higher wage earners contributing more in taxes than before.

So, is the 2019 COLA increase reason for retirees or those approaching retirement to celebrate? Well, yes and no. An extra $39 a month could be a huge boost for someone who relies heavily on Social Security benefits. That said, COLA is designed to address inflation and that 2.8% could easily be eaten up by rising living expenses. Overall, the adjustment will likely keep the playing field level, but won’t give retirees very much financial wiggle room.

We are still at least a month away from an announcement potential changes to Medicare premiums for 2019. These changes will affect the monthly payments for those enrolled in the program. According to the Social Security Administration, beneficiaries will find out in December what their actual benefits will be for the year.

Yes, the optics of the most significant COLA increase in seven years look good on the surface. But financial advisors should still make Social Security a priority when meeting with clients and prospects. There are multiple variables involved with Social Security (when to claim, whether or not to keep working, etc.). Those who don’t have a solid grasp on the program could easily miss out on strategies that will help maximize their benefit amounts.

To help, Legacy Financial Partners has put together a newly updated Overview of Social Security & Retirement Benefits guide. Designed for consumers, the guide covers the ins-and-outs of Social Security retirement benefits in a way that will help them make an informed decision as you work together on their overall plan.

If you would like to request a copy, get in touch at 877-614-0141, or info@legacy-financial-partners.com

 

 

 

 

Exploring Behavioral Finance Bias

Selling financial products and services can be a challenging profession. The process of turning a newly identified lead into a loyal client involves multiple factors. Everything from your initial marketing touches to the way you come across during personal interactions can, and will, influence the consumer’s final decision. One of the biggest factors at play here is also among the most challenging to work through – behavioral finance bias.

A concept rooted within the sub-field of behavioral economics, behavioral finance bias involves the psychological, social, and personal reasons a consumer might struggle to make rational financial decisions. More broadly speaking, these biases are the answer to questions like:

  • Why do your clients balk at logical solutions?
  • What causes them to reject options that will help achieve their goals?
  • Why are you getting panicked phone calls from a client who suddenly changed their mind about a sturdy financial plan?

The cognitive and emotional nature of these biases can present a tough obstacle to overcome, despite the financial impact. However, a little insight can be a valuable tool when trying to convince a biased consumer to make a rational financial decision. Let’s break down a few of the more common biases.

Cash

Loss Aversion

This describes the tendency to avoid loss, rather than go after gains. For example, the emotional effect of losing $100 is heavier than the financial gain of finding $100 on the sidewalk. This can impact the ability to fully recognize the value of products with growth components or even lead to a flat-out rejection of any financial solution whatsoever.

Confirmation Bias

You don’t have to look very hard to see examples of confirmation bias. For instance, they will ignore information that contradicts their own beliefs. Or they might spin that information in a way that supports a predetermined conclusion. Because it can create a sense of overconfidence, confirmation bias can have dramatic consequences on one’s financial decision making. A client or prospect with heavy confirmation bias will often resist advice or options, even if backed by research or relevant information.

Snake-bite effectSnake Bite Effect

Once bitten, twice shy. It’s only natural for people who have a negative experience with financial solutions to be cautious when presented with a product or plan. The issue here is that the conditions could be completely different, or the consumer could be conflating products that are not comparable.

Endowment Effect

Some people tend to hold on to properties they already own, placing more value than they are actually worth. For instance, a prospect may have a large sum of money in a low-growth savings account. Because they have accumulated that sum over the years, they may be averse to using these funds to purchase specific retirement vehicles that match their goals.

Most, if not all, advisors will encounter these and other behavioral finance biases at some point in their career. In fact, it wouldn’t be a stretch to say that nearly every consumer carries some sort of bias affecting their decisions. The problem arises when that bias creates misconceptions about the value of money and financial planning. Overcoming a behavioral bias can be a little more challenging than a “typical” consumer objection. Even more so when that bias is rooted in emotions and/or personal experiences. The trick is to first identify the bias as soon as possible. Use probing skills to determine why that specific person holds that specific bias. From there, use your expertise to educate, inform, and change their perspective.

Story-Driven Content Marketing Tips for Financial Professionals

creating contentContent marketing is becoming one of the most valuable and effective methods for consumer engagement, rapidly outpacing traditional strategies many businesses have come to rely upon. According to recent studies, 70% of internet users would rather learn about a product or service through content versus traditional advertisements (Cision). Chances are, most of you are already engaged in some form of content marketing. This could be through press releases, blogging, or social media posts. While the overall goal for any marketing strategy – content or traditional – is the same, there is one aspect that separates the former from the latter – storytelling.

The concept behind story-driven content marketing is simple – deliver the message in a way that resonates with the people you are trying to reach. Note that we use (and emphasize) the word “people,” rather than “consumer” or “prospect” here. This is an important distinction to make, especially for financial professionals. After all, you’ve built a career around your ability to make personal connections with clients, so why wouldn’t you use a marketing strategy that does the same?

Humanize Your Message

Like any other entrepreneur, you are selling a product – financial advice, life insurance policies, annuities, etc. Beyond that, you are offering something far more significant – peace of mind, protection, the financial security to retire without worry. These are more than just buzzwords we see used frequently in ad/marketing campaigns, they are real goals set by real people. Facts, figures, percentages, and stats are all an important part of the overall persuasion process, but not many people find data emotionally compelling.

A good way to capture their attention is to lead with a narrative that focuses on the overall value of financial services/retirement planning, rather than you specifically. Tell a story based on the goals, concerns, situations, pain points, and – ultimately – solutions that many people experience on their journey toward financial independence. Remember, at this point, you’re trying to engage; not sell. Keep things loose and low-pressure, but close with a call to action. Once your well-crafted and emotionally-relevant story draws them into your funnel, follow up with more detailed and specified content geared toward their situation.

Fine-tune Your Message

Before launching your story-driven content marketing campaign, there are a few key things to remember:

  • Be Concise: Creativity and flowery language is fine and can often help drive the emotional aspect of your content. But don’t go overboard. Your narrative should be well-rounded, concise, and easily digestible. Avoid using jargon and industry speak until they get a little farther along in the funnel.
  • Be Real: Most people can smell a hard sales-pitch a mile away. This is one reason why more businesses are moving away from traditional marketing in favor of content marketing. A good story-driven campaign shouldn’t come across as an obvious advertisement. Make it a conversation that gets more personal with each interaction.
  • Be Credible: Your narrative not only feel real but be real as well. Using a real-life scenario as the foundation for your message can provide a sense of authenticity. Clients who have given referrals or testimonials are a good source for this. Reach out and see if any might be willing to share their success stories.

**Side Note – This tactic can also be used for agent/advisor recruitment campaigns. Who better to speak on the benefits your agency has to offer than current employees?

blogDelivering Your Message

The medium used to deliver your content can be just as important as the content itself. While blog posts and/or emails might be ideal for written content, don’t limit yourself. Consider repurposing your content as a script for a short video to post on social media and your website. This will let your audience put a face with your name. In turn, you will establish a sense of trust and credibility.

Story-driven content doesn’t always mean “long-form” content. A well-designed mailer or social media post that uses compelling imagery and minimal text can just as effective as a two – three-paragraph narrative. Whatever methods you use, stay focused on making meaningful and emotional connections with your audience.

It’s Your Turn

Have you delved into the world of story-driven content marketing? If so, did your efforts pay off? What worked for you? What didn’t work? If your campaigns could benefit from a little outside support, or if you just want to brag about your latest success, feel free to get in touch. We’d love to hear your story.

CD Replacement Month Is Here

Black Monday stock market crash

Black Monday, 1987. The origins of CD Replacement month.

Historically speaking, October has been a tumultuous month for the economy. This year will bring the 31st anniversary of Black Monday (October 19, 1987) and the 29th anniversary of the Friday the 13th Mini Crash (1989). While the more recent financial crisis of 2008 played out over several months, much of the action – Lehman Brothers and WaMu bankruptcies, stock market crashes, global panic, bailouts, etc. – all took place during the last half of September and throughout October. We won’t get into the reasons behind these crises, but each had one common result – investors went scrambling for safety.

The History of CD Replacement Month

Looking back to the Black Monday crash when the Dow Jones Industrial Average sank by 22.6%, many found that safety in the form of Certificates of Deposit. Investors withdrew their exposed investments and transferred their money into CDs. With guaranteed interest rates and FDIC backing, CDs were a widely used means of protecting one’s money from market volatility; a fact that remains true today. The return on CDs today is nowhere near what it was 31 years ago. However, things are slowly improving thanks to the recent federal interest rate hikes.

However, due to their low rate of return, CDs, do not hedge well against inflation. At least not when compared to other products, like certain annuities. This is especially true with long-term CDs that many consumers automatically renew out of habit. As a result, consumers may be losing real-world value that could be parlayed into another, better solution.

CDs and Interest Rate Hikes

Although this week’s rate hike will boost the “risk-free” return for CDs, it will take at least 30 days to see the effect. Consumers who jump the gun will be locked into the lower rates, stuck holding onto an investment that might not keep up with inflation. The top-of-mind awareness created by CD Renewal Month is a great opportunity for advisors to start the conversation with clients and prospects.

The discussion could be as simple as a CD review or renewal, or how they can provide retirement income. However, you should offer an overview of their options and alternatives to CDs. To help, Legacy Financial Partners has a wealth of resources for agents and advisors looking to leverage these CD replacement opportunities.

Our 2018 CD Renewal Kit is a comprehensive AND complimentary package that includes a CD prospecting letter, consumer-facing presentations, and additional materials that will help you take full advantage of CD replacement month.

2018 CD Renewal Kit

 

 

Four Existing Resources Advisors Can Use to Boost LIAM Marketing Efforts

Life Insurance Awareness MonthLike any entrepreneur, many financial advisors set aside at least a few hours a week looking for tips that will help take their marketing game to the next level.

Keeping up with the latest trends and evolving digital landscape—and implementing them into your existing marketing strategy—can be a time consuming, but necessary endeavor for advisors trying to stay ahead of their competition. While the time you spend looking for the next big marketing opportunity is certainly not wasted, sometimes it can be more efficient to stick with your existing resources.

For instance, we are now halfway through Life Insurance Awareness Month. With only a couple of weeks left to take advantage of the top-of-mind momentum created by this educational initiative, now might not be the best time to launch an untested marketing plan. This is one of those situations where the most effective and practical solutions might be those resources already at your disposal.

Current Clients

The old saying, “dance with the one who brung ya,” can be words to live by. Especially if time is a factor. For advisors, this means leveraging your current book of business to create new opportunities. Much like you would for milestone occasions (birthdays, anniversaries, holidays, etc.), email clients about life insurance coverage. This can be a reminder about a policy review or update, information about new products, or a simple invitation for an in-person appointment.

For example:

LIAM email example

Prospect Lists

Wherever the prospect is in your marketing funnel, an event such as LIAM presents an opportunity to move them one step closer to conversion. Consider this an extension of your ongoing drip campaign and make contact through your regular newsletter or a lead nurturing email.

For Example:

 

Drip email marketing

 

LinkedIn

As the most popular social network Facebook is the typically the “go-to” platform for lead generation and advertising. However, LinkedIn is also a great marketing resource, especially for advisors trying to make professional connections. Like Facebook, LinkedIn allows you to post relevant content, share it with your connections, and participate in groups. Additionally, LinkedIn offers a wide range of targeting options for ad campaigns and sponsored posts.

Printed Promotional Materials

In the digital age, the value of printed materials is often overlooked. According to the 2017 Direct Marketing Association Response Rate Report, direct mail response rates once again outranked digital. According to studies, that’s 5.1% for house lists and 2.9% for prospect lists versus 2% for all digital channels combined. While effective, a direct mail campaign might not get off the ground quick enough to capitalize on the remaining LIAM momentum. This is when flyers might be a good alternative to consider. Use a well-designed flyer that directs åpeople to your website to promote your brand and services. Just make sure they’re in a well-trafficked area and posted with permission.

Ideal spots might include:

  • Public Library
  • Coffee Shops
  • Book Stores
  • Banks
  • Grocery Stores
  • Gyms/Fitness Centers

Request our Life Insurance Awareness Month Kit to make the most out of your life insurance prospecting efforts.

What You’ll Get:

  • Customizable Prospecting Letters
  • Email Drip Templates
  • Factfinder
  • Life Insurance Prospecting Ideas
  • Concept and Presentation Pieces
  • Consumer Facing Life Insurance Overview Powerpoint and more!

    Life Insurance Awareness Month Form

Using Social Media During Life Insurance Awareness Month

Awareness campaigns and social media go hand in hand. No matter the topic, these initiatives would struggle to get off the ground without social media driving the conversation. And as many of you have already noticed, this month’s conversation revolves around life insurance. While the primary intent of Life Insurance Awareness Month is consumer education, this annual initiative is a chance for advisors to boost their brand and reach new prospects.

Taking advantage of the social media momentum behind Life Insurance Awareness Month doesn’t require a complete overhaul of your existing strategy, but it does call for a little fine-tuning. Consider the following tips when outlining your September social media plans.

Post With Purpose

Launched in 2004 by non-profit organization Life Happens, Life Insurance Awareness Month is an example of purpose-driven marketing. This is a campaign that strives to make a more personal, emotional connection with the public by addressing a specific need or cause. Consistency is a crucial part of these campaigns, which is why advisors who leverage social media during LIAM need to make sure their message fits the overall narrative about life insurance awareness. There are a few trending hashtags that can help bring you into the LIAM conversation (and boost your organic reach in the process):

  •            #LIAM18
  •            #LifeInsuranceAwarenessMonth
  •            #LifeInsurance
  •            #TakeThePledge

The most effective hashtags are both relevant to the topic and already in use. While there are other hashtags we’ve seen advisors use for LIAM-related posts, not all are exclusive to your services. Also, keep in mind that using too many hashtags in one post can actually limit post engagement. Avoid using more than two or three at a time.

  •           #AreYouCovered
  •           #Insurance
  •           #Life
  •           #Coverage
  •           #IncomeProtection

Target Strategically

The overwhelming majority of consumers, regardless of their age, now consider social media (or other online resources) to be a valuable source of information when searching for financial services. In fact, a recent LIMRA study showed that Baby Boomers are now more likely to use the internet for information and recommendations than Millennials and Gen-Xers (who are both more likely to consult friends and family for advice). This is why it’s crucial for advisors to not only maintain a strong social media presence and an up-to-date website. Additionally, they need to post content that will resonate with your specific target audience. Building custom audiences based on consumer details is a great way to get the right message to the right target.

Let’s say you want to share a message that promotes the “family protection” aspect of life insurance. Because this will likely hit closer to home for younger to middle-aged consumers with children than it would someone close to retirement age, use age and demographic-based metrics to hone in on parents aged 30 – 50 years old. Most social networks provide a wide range of targeting options. The key is to determine who will respond better to each specific post and target accordingly.

Timing Is Everything

The majority of social media users visit one or more platforms on a daily basis. However, few of them spend the entire day scrolling through their feed. Scheduling your posts during peak engagement times can significantly increase your organic reach. While your results may vary, peak posting times, according to several studies, are as follows:

Facebook:

·      12 p.m. – 3 p.m. Monday, Wednesday, Thursday & Friday

·      12 p.m. – 1 p.m. Saturday & Sunday


Twitter:

·      9 a.m. – 4 p.m. Monday – Friday (with peak engagement on or around 3 p.m.)

LinkedIn:

·      Early to mid-morning, early afternoon & early evening Monday – Friday

Keep in mind that social media marketing is an art, not a science. Use these tips as a starting point when crafting your LIAM social media strategy and adjust as needed. And remember that, when jumping on board with a widespread campaign like LIAM, you’re becoming part of a bigger conversation. It’s up to you to make the most of it.

 

Request our Life Insurance Awareness Month Kit to make the most out of your life insurance prospecting efforts.

What You’ll Get:

  • Customizable Prospecting Letters
  • Email Drip Templates
  • Factfinder
  • Life Insurance Prospecting Ideas
  • Concept and Presentation Pieces
  • Consumer Facing Life Insurance Overview Powerpoint and more!

    Life Insurance Awareness Month Form

 

Insights For Advisors: Millennials and Life Insurance

Millennials on their phonesIn many ways, Millennials are the perfect storm of opportunity for agents and advisors. The largest generation in American history currently represents more than one-third of the workforce. With an estimated $30 trillion over the next 30 years, they will inherit the largest transfer of wealth ever. With the majority of Boomers at or near retirement age, and Gen-Xers turning that corner, advisors would be wise to start paying more attention to Millennials.

When it comes to life insurance products, the Millennial market is wide open territory. The 2016 Life Insurance Barometer Study (Life Happens/LIRMA) found that only half of the Millennial population carries life insurance. Interestingly enough, half also realize the financial impact caused by the death of a wage-earner would be felt immediately. So, yes, Millennials are thinking about the big picture. And according to one study, are twice as willing to discuss long-term savings goals than Boomers. However, advisors who try to reach this demographic with traditional strategies are less likely to have those conversations.

Tapping into the Millennial market requires an understanding of their values, perspectives, needs and, more importantly, challenges. (Data source: Pew Research Center, unless otherwise noted)

Education & Employment

  • Roughly 40% of Millennials (aged 25-39) have earned a bachelor’s degree or higher, making Millennials the most highly educated generation in history.
  • Unemployment rates among Millennial college graduates are significantly lower than those with only a high school diploma (3.8% vs. 12.2%).
  • Millennials are more likely than Gen-Xers to stay with the same employer for 13 months or more (63.4% vs. 59.9%).
  • The median household income for Millennials is $72,500 (second only to Gen-X households).

While Millennials struggle with student debt and reduced earning power now, things will likely improve over time. With the increasing value of a college education, young graduates often see their student loans as an investment in their future. This suggests a willingness on their part to play the long game if they can be confident it will pay off in the end. Consider applying this logic to your strategy. Start with what they can afford/attain now and outline how that can be used as a stepping stone to bigger and better things down the road.

Values, Priorities & Perspectives

  • 45% of Millennials feel that most businesses do not behave in an ethical manner (Deloitte).
  • Half of Millennials say they do not want a primary financial advisor, and only 1 in 3 have one (Life Happens/LIRMA).
  • Overall, Millennials are most likely to need information and education about life insurance (Life Happens/LIRMA)
  • More than 80% rank family as their top priority (52% said “being a good parent” and 30% listed “successful marriage” as most important) versus 15% who said “having a high-paying career”).
  • 31% say they currently earn enough money, while 88% feel confident they will in the future.

Millennials are skeptical when it comes to business and finance-related matters. This stems from a lack of understanding about the role advisors can play in their lives. At the same time, their optimism and desire to maintain a stable and successful household present an opportunity for advisors to ease that skepticism. A transparent, ethical, and mentoring approach will go a long way toward establishing credibility. Make a personal connection to show that you care as much about their family’s well-being as they do. Work with them, rather than sell to them.

Making the Connection

  • 75% say new technology makes life easier.
  • More than 50% will research life insurance online, but purchase their policy from a professional (Life Happens/LIRMA).
  • 54% will turn to social media for recommendations on a financial professional (Life Happens/LIRMA).
  • 67% say it’s important to meet with a financial advisor in-person (Center for Generational Kinetics).

While Millennials are fully immersed in the digital world, they also value human connections. They thrive on interpersonal relationships. Expect Millennial clients to come in armed with whatever knowledge they were able to gain from web articles, eBooks, and other digital content. However, they’ll need you to fill in the blanks for them. Also keep in mind that members of this tech-savvy generation might respond well to incentive-based wellness programs, like those that provide wearable gadgets to policyholders.