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Making the case for disability income insurance with Millennials

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When it comes to working with the Millennial Generation­—roughly those born between the early 1980s to the early 2000s—it’s important to remember they often navigate the world in a different way from previous generations.

Unlike their parents and grandparents, who may have worked at the same company for their entire careers, Millennials may be more accustomed to moving around from one job to another and may not have loyalty to a particular firm.

Because of this transiency, and the reality that every company has a different benefits package, Millennials may have a greater need for a financial plan that is distinct from a given employer, and that includes disability income insurance. 

They’ve also experienced firsthand the ups and downs of the economy and tend to be clear-eyed about the possibility of things not working out. As a result, many Millennials appreciate there is a need to have certain financial products themselves, rather than those intertwined with a company.

Because of the precariousness and competiveness of the job market, some understand intuitively that protection against disabling injury or illness may be necessary in a climate where someone can easily be left behind. 

Millennials also hunger for personal stories, as evidenced by the popularity of reality shows on television. And, like many clients, there is no better way to educate a Millennial about the need for DI insurance than by telling a story that illustrates how important it is in their lives.

This is something I understand and share first hand. When I was nine, my father was badly injured in a car accident and didn’t have DI insurance. He was left with over $1 million in medical expenses. My dad, who was in his mid-30s, lost his business as a commercial real estate broker and became completely dependent upon others. We lost our home; my parents drained their retirement income, and eventually, they divorced.

Had he owned DI insurance, our future as a family would have looked much different. My dad would have had some protection against his lost income and most likely would not have exhausted other savings and investment accounts.

My parents would have had a resource to help pay for critical items, such as our mortgage, utility and grocery bills, and other typical family expenses. Our family could have focused more closely on my father’s recovery, rather than coping with the added burden of extreme financial stress.  Ultimately our family may have remained intact.

I find that it is critical to share personal stories demonstrating the need for DI insurance with Millennials, along with facts and figures. It is also important to understand that despite their high level of education, many may not be particularly well educated about personal finances.

Remember that this is a generation accustomed to having information available at their fingertips. They may not have the initial understanding of the ins and outs of financial products. But before or after they have a consultation, Millennials are likely to look online to validate what they’ve heard and will also consult with parents, a spouse or significant other, and peers.

They may not have one conversation with a financial professional and then be ready to follow his or her lead. They may come back with a lot of questions. And they may demand integrity. Many Millennials want to work with a company that puts its money where its mouth is.

One thing I try to impress upon younger clients is the need to lock in affordable rates for DI insurance when they are more likely to be young and healthy. While many complain they can’t afford it, I will point out that oftentimes they are spending between $20 and $80 per month on things like coffee and cell phone insurance, when they could in fact divert some of their funds to a small disability income policy to lock in their insurability early on and increase their premium coverage as their income grows in the future. s

Millennials, especially younger ones, can still feel invincible. As you work with them, you will see that as every few years pass, they may be more receptive to the need for DI insurance.

But like all clients, Millennials are often reluctant to consider they may become disabled. People do not want to think they will be unable to use their skills and strengths.

But do not let this wariness be the reason you don’t have a conversation about DI insurance. Make sure you have the conversation and that you document it.

Although the client will ultimately choose whether or not to purchase a DI insurance policy, do not let your hesitancy to initiate a potentially uncomfortable conversation be the reason a person may end up in a terribly vulnerable situation someday.