Several trends in American families and workforces are reshaping the consumer market for life insurance and related products, and new opportunities abound for wise brokers and agents. Before we can seize these opportunities, though, we need to address a common hurdle in our industry: Historically, some of us have been slow to change and meet new realities.
We all know the refrain, to borrow from an automobile commercial, “This is not your father’s ________.” Fill in that blank with “employment market,” “traditional family,” “interest rates,” “company pension,” or any of a number of descriptions for the way things used to be. We know the world our clients inhabit has changed, and yet, all too often, we fail to demonstrate we understand their lives and have solutions to their needs.
Of course, consumers don’t necessarily know all the needs they may face, or what can help address them. As Henry Ford reportedly remarked, “If I had asked people what they wanted, they would have said faster horses.” More recently, how many of us knew we wanted an iPad — and how many now can’t imagine life without one?
Insurance carriers today offer creative solutions for current as well as age-old needs, but our industry still has miles to go to fully educate consumers. Yet despite Americans’ lag in awareness of needs and potential solutions, the market for life insurance and innovative riders may be more abundant than ever. Following are some demographic shifts we need to understand, and some ideas on how to leverage our wisdom into compelling client conversations and fruitful relationships.
In 2050, the number of Americans age 65 and older is projected to be 88.5 million, more than double its projected population of 40.2 million in 2010, according to the U.S. Census Bureau. For a married couple age 65, there is a 50 percent chance that at least one spouse will live to age 94, and a 10 percent chance that one will live to age 104. Clients, therefore, need solutions that address the longevity challenge: their fear of outliving retirement income.
According to updated U.S. Census reports, more than half of all American households are unmarried, with single people who live alone comprising 27.5 percent of households. Married couples with children comprise 19.6 percent, a figure down more than half since the 1970s, when the percentage was 40.3. The percentage of married couples in households with no children is statistically stable at 29.1 percent, down slightly from 30.3 percent in 1970.
To rephrase this, in 1970, more than seven out of 10 Americans lived in married households (70.6 percent). In the latest census figures, fewer than half of Americans live in married households, and the change is overwhelmingly in the “married with children” demographic. As married households with children have been decreasing, households that are single men living alone, single women living alone, and unmarried mixed households have grown from 29.4 percent in 1970 to 51.4 percent in 2012.
Truly, this is not the marketplace many of us initially were trained to serve. Likely, this new American reality is not “our father’s Oldsmobile,” to finish that earlier quote. These new households still need life insurance and other financial planning products, but they need them as innovative solutions that meet unique and emerging needs. Before we start sharing solutions, though, let’s look at one more game-changing factor of American life and work.
If you and I stood around an office water cooler, assuming we could find one, we would no doubt agree corporate life has changed over the years. Among other transformations, including water coolers themselves, we have fewer examples of the man or woman who invests his or her entire career with one organization. Not only are employees more likely to make multiple career moves, with one in five workers anticipated to change careers in 2014 alone (according to CareerBuilder.com), the golden age of company-sponsored benefits and pensions for lifelong employees seems behind us.
While we might believe that, generally, people have fewer employer-related benefits, and therefore they might need more help than ever finding the right benefits and insurance solutions, another demographic shift could shake up our assumptions.
This summer, the independent research firm Edelman Berland found that more than 53 million Americans — 34 percent of the entire U.S. workforce — are freelancing. These numbers are up from eight years ago, when a 2006 study by the General Accountability Office found there were 42.6 million “contingent workers.”