Millennials have faced one financial hurdle after another: the 2008 financial crisis, student-loan debt, soaring living costs and now financial difficulties due to the pandemic. A survey by Insider and Morning Consult found that while 70% of millennials have a savings account, 58% have a balance under $5,000. Despite their best financial efforts, a large debt load on average is preventing them from saving as much as they’d like. Though many don’t carry credit card debt or may owe less than $5,000, about 68% of millennials born between 1981 and 1988 are still paying off their student loans.
Millennials make up 35% of the American workforce, giving brokers the opportunity to educate clients on how benefits play a part in successful financial planning and how to market offerings so they are more relevant to millennial employees.
Playing the Risk Game
According to a recent survey, millennials are optimistic investors and expect the highest investment returns of any generation. Many millennials like to understand what their money is going toward. They enjoy understanding the risk-reward ratio of financial planning and investing and may appreciate that intelligence coming from their employer. This demographic can bring an investment mindset over to other financial applications, including insurance.
Beyond choosing the best benefits in line with a monthly budget, brokers can help clients position benefits as income protection and replacement. For example, in discussing supplemental insurance, clients educate employees that supplemental coverage helps with expenses health insurance doesn’t cover and that adding a mix of products and services is worth considering to invest in one’s health. After all, if a serious injury or illness occurs, these plans can have a high return on investment.
In addition to critical illness, accident and disability insurance, one option on the rise for millennials is life insurance. A recent study by LIMRA and Life Happens found that 45% of millennials are more likely to buy life insurance due to the COVID-19 pandemic, with 48% saying they will buy life coverage in the next year.
Complementing supplemental coverage as part of a holistic benefits offering, financial wellness is a value-added service to support and educate on a variety of topics, including retirement, budgeting, and reducing credit card and student-loan debt. A sound financial wellness program can help reduce stress and increase employee productivity. In fact, 83% of employers believe that financial wellness tools can lead to greater productivity in the workplace.
Manage Benefits Like Money
While looking for an insurance carrier with products millennials are more likely to desire financially, make sure they also offer technology catering to the millennial workforce — with the tools that provide the ease of use and accessibility to which they are accustomed.
Consumer-friendly apps have become the norm to more directly control their money, and the insurance industry continues to evolve with technology to enhance the customer experience. Brokers should look for carriers that provide the kind of digital solutions that may be considered second nature to this significant slice of the U.S. workforce, including those for benefits administration, enrollment and ongoing education, policy management and filing claims.
By tapping into a millennial mindset, brokers can help market benefits in a new light. Positioning insurance offerings as a necessary item in a millennial’s budgeting plan — just like the investing many have become so passionate about — could help clients provide their workers with the financial protection to better even out their benefits balance sheet.
Millennials (Image: Shutterstock)