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Life Health > Life Insurance > Permanent Life Insurance

The Great Wealth Transfer

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What You Need to Know

  • Millennials are turning 26 to 41 this year.
  • They may not have settled down and bought homes.
  • They should consider getting covered now, anyway, to lock in good rates.

It is no secret that we are in the midst of The Great Wealth Transfer, with the Silent Generation and baby boomers passing millions of dollars to their millennial adult children every day.

If anything, advisors have long been on the financial front lines of helping the Silent Generation and baby boomers prepare for this transition.

But, as wealth is transferred between generations, that shouldn’t mean an advisor’s work is done or client relationships are suddenly concluded.

If anything, this transfer represents a unique opportunity for advisors to build new — and equally as fruitful — relationships with millennial recipients.

Certainly, some advisors who have had long-term relationships with Silent Generation and baby boomer clients might already know their millennial children.

However, for those that don’t or want to further establish a relationship, life insurance can be a great starting point for which to build from.

Here’s how.

1. Show millennials the (new) way.

As my colleague Yaron Ben-Zvi wrote in another ThinkAdvisor article last November, some life insurance has finally entered the digital age.

That means the ability to apply for and get coverage for term life online in minutes, often without the need for a medical exam.

For millennials who have come of age in an on-demand world, this ability to buy online can be the difference between getting coverage and delaying making the purchase.

Despite this, many millennials don’t know that such offerings exist.

After all, a recent survey by Haven Life found that 59% of individuals say they most consult their family for financial advice — and most Silent Generation and baby boomers purchased their own life insurance policies decades ago, when applications were still entirely paper, took months to process and medical exams were required.

When millennials are asking Dad where to get life insurance, “Talk to my advisor” is the common response.

When a client’s millennial child follows that advice and reaches out to advisors for guidance, helping them understand their universe of options is the first step toward building trust and showcasing value — the foundation of any long-term relationship.

2. Help them think long-term.

Millennials are often portrayed in pop culture to be flighty and noncommittal.

While I certainly can’t speak for all millennials, I can say that hasn’t been my experience.

Rather, what I have seen is that millennials are simply delaying some of the traditional life events that traditionally trigger the need for life insurance — whether getting married, having a child or buying a home.

It’s understandable then that millennials who aren’t married, don’t have a kid or don’t own a home might not understand the corresponding financial implications for when they do so.

This presents an opportunity for financial advisors to help them think through corresponding hypothetical considerations and what it might mean for their life insurance needs down the line.

In fact, the same Haven Life study found that “having a clearer understanding of their own long-term financial needs” was a top contributor to what would ultimately sway an individual to purchase a life insurance policy today.

But, helping millennials get a better understanding of their long-term financial needs is important for another reason: it can actually help them save money.

Age and health status, which typically have a direct correlation, are an important contributor to life insurance premium pricing.

After working with a millennial and determining they have a long-term need for $2 million in financial protection, for example, that millennial would likely get a more favorable monthly premium quote today than waiting five or 10 years until they do have a spouse, kid or home.

3. Point to supplemental resources.

Inheriting wealth requires more than just purchasing life insurance — especially as many members of the Silent Generation and baby boomers transfer their wealth to their millennial children with the expressed intention that it continues to get passed down to subsequent generations.

Investing, managing and protecting wealth over the long-term is, of course, advisors’ bread and butter.

As advisors look to start that relationship with millennial clients, it can be helpful to point them to some immediate resources that can provide such financial security.

For instance, online trust and will creation resources are good places to start.

In some cases, these and other wealth management resources might be available to clients for free or at a discounted rate through their insurer — whether their life policy or even a P&C provider.

Helping clients take advantage of the tools already available to them can be an effective way to kick-start a longer term relationship.

Plus, with some of the “basics” taken care of, advisors can instead focus on higher-value investment and wealth management conversations with millennial clients.

Ultimately, after having worked with their families for several years, advisors might already have a proven track record from which to build from when looking to engage millennial beneficiaries of The Great Wealth Transfer.

Starting with a life insurance conversation, however, is a way to help formalize that relationship and get the conversation started.


Wade SewardWade Seward is head of distribution strategy at Haven Life.

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