Close Close

Life Health > Health Insurance > Your Practice

Millennials Need to Protect Their Income

Your article was successfully shared with the contacts you provided.

Millennials often get a bad reputation for being behind in their professional endeavors. A stagnant economy in the late 2000s led to many not starting their careers off on the right foot. But, with the economy recovering and the average millennials are now in their mid-to late-20s, this demographic is starting to settle into their profession and accelerate in their careers.

(Related: ‘Disability Insurance Is Too Expensive… and I’m Invincible’)

Millennials finding their footing in adulthood presents advisors with a huge opportunity to tap into this market for individual disability insurance (IDI) sales. This is because, as millennials attain greater professional achievements and grow their incomes, they are incurring additional financial commitments and family responsibilities. If your millennial clients were to experience a disabling health condition, many could be exposed to significant gaps in income protection.

In your conversations with millennial clients, here are five key points about IDI to bring up with millennial clients.

1. Personalized Coverage

Millennials have grown up in an era of personalization. From technology to clothing, food to transportation, this generation has come to expect customizable products that meet specific needs. The fact that IDI policies can be personalized to meet millennials’ professional milestones could catch their attention.

Most IDI plans have strong core benefits that can help clients protect their income, with accompanying riders that can help tailor coverage to match their occupation, life stage and budget. Here are a few to discuss that can help millennials as they grow personally and professionally.

2. Family Caregiving Benefits

A great example of coverage that may resonate strongly with the millennial audience are family caregiving benefits. Some IDI policies offer family caregiving benefits, which can help individuals take time away from work to care for a loved one with a serious medical condition without worrying about losing income. Not only is this benefit useful for millennials with young children but also it can allow them to take on parental caregiving responsibilities.

3. Student Loan Support

As many millennials work their way through paying off student debt, the student loan payback benefits offered by some IDI plans are worth highlighting.

Young workers (Photo: iStock)

(Photo: iStock)

If an individual was to become totally disabled, the insurance company would typically pay the individual a benefit in the amount of the individual’s student loan agreement. This type of benefit could help millennial clients — especially in medical or dental professions where student loan debt can be significant — ensure they wouldn’t fall behind their student loan payments, should they experience a disabling injury or sickness.

4. Protecting Salary Increases

Some IDI policies include built-in benefits or riders that can help clients ensure their coverage matches their current salary. One type of feature millennials may appreciate can automatically increase a client’s benefit each year. As millennials progress in their career, this type of rider allows their IDI coverage to keep pace with their rising income each year for a set number of years.

Another way for a client to increase coverage throughout their career is by adding a rider that allows for periodic benefit increases. Instead of increasing a policy’s benefit each year, a benefit increase rider allows your client to increase his or her benefit payout every few years on the policy anniversary — without the need for medical underwriting. This can ensure a client’s policy stays current with salary increases and provides adequate income protection, with no additional cost to your client.

5. Youth

There are a few other points about purchasing IDI that may resonate with younger clients. First, the underwriting process for securing IDI coverage can often be easier the younger and healthier a client is. Younger clients could avoid much of the in-depth underwriting process by going through a simplified underwriting program.

Simplified underwriting can be ideal for a young, healthy applicant who is just starting in his or her career and earning at a lower income point than other prospective IDI clients (such as physicians or attorneys). When underwriting a client through a simplified underwriting program, carriers will have eligibility restrictions based on the client’s age and a benefit amount.

Another point to address to millennials who are considering IDI coverage is that, once they’ve received underwriting approval, their premium and policy provisions can be locked in place for the duration of the policy — as long as premiums are paid on time. This can mean a client could have a policy for decades and pay the premium amount based on the original issue age in his or her 20s or 30s.

As millennials mature in their careers, they can be the perfect candidate for IDI sales. As you prepare talking points for your next sales meeting, consider how to play up the personalization aspect of many IDI policies currently on the market. Millennial customers will value not only the fact many riders and additional benefits can be customized to suit their individual needs but also the way they can protect the lifestyle they’ve worked hard to build.

— Read 30 Under 30, Part 3: Young Life, Health and Annuity Stars on ThinkAdvisor