The Baby Boomer ship has sailedpar Andrew Rickard | October 27 2016 11:30AM
Now that Millennials and Gen Xers are the main markets for life insurance, it's time for companies to develop straightforward, quick-issue products.
Elaine Tumicki is corporate vice president of insurance product research at LIMRA. In the most recent issue of LIMRA's MarketFacts Quarterly newsletter she says nearly three quarters of new life insurance buyers are under age 55, and notes that 4 in 10 life insurance policies are now purchased by consumers aged 25 to 45. "For the broad life insurance protection focused market (other than small final expense policies), the Baby Boomer ship has sailed," she writes. "In 2016, Millennials represent half of the prime life insurance protection market."
The industry needs to take a different approach
If insurers want to appeal to this younger demographic, she argues that the industry needs to take a different approach. "Given the amount of student loan debt the typical Millennial has, low cost would probably be a key feature," she says. The article goes on to point out that Millennials don’t remember a time when they had to order consumer products from a catalogue and then wait for them to arrive. "Life insurance products that take weeks or months to issue are not likely to resonate with this market segment."
But how best to distribute these products? LIMRA's research shows that most people prefer to purchase life insurance in person so that they can ask questions and get immediate answers, but Tumicki warns that insurers will still need to provide the kind of online purchasing options available for other retail products. "True internet-based distribution seems to be a must for the near future," she concludes.