Sally Dickter, Marketing Senior Vice President, Franklin Madison Group
Based on the 2021 Life Insurance Engagement Report, a Franklin Madison collaboration with PYMNTS that collected and analyzed 2,326 survey responses:
Generation Z consumers are most likely to look to their financial institutions, financial advisers or FinTechs to seek life insurance product information and gain access to new policies.
Financial Institutions now have an unprecedented opportunity to lead Generation Z consumers from underinsured by default...toward the FI as a self-selected source of accessible, affordable, and understandable life insurance.
Why are these younger consumers the most open to acquiring policies from sources other than employers or insurance agents?
Generation Z employment options and pandemic economics give added value to portability and stability for life insurance. That’s where the enduring financial institution relationship over time adds value and appeal:
- For those taking jobs within the gig economy or within shifting organizational work models
- For those forging career paths by job-hopping among traditional workplaces without transferrable benefits.
And the single purpose of an insurance agent — to sell insurance — is less appealing than the credibility of existing financial relationships where access to insurance is an added service.
Over 70% of Generation Z consumers enter independent adulthood with higher debt than assets, primarily due to student loans that are no longer easily forgiven and may not end with death.
So, it’s not surprising that the vast majority of Generation Z consumers are interested in learning about life insurance – primarily as part of an overall plan for financial security (43.6%) and to make sure others are cared for (41.5%).
Remember that the oldest Gen Z consumers just turned 24, reaching financial maturity amid the pandemic’s vast impact. They respond with a propensity to seek life insurance information independently from non-traditional sources.
Perceptions and emotions are powerful drivers in their decisioning, as personal debt and physical vulnerability exceed financial assets and security. The best messaging satisfies the search for financial stability to help them balance income growth and debt relief — with affordable life insurance protection for both.
Those who chose not to purchase a policy gave reasons that were essentially the result of exposure to poor — if any — marketing messages, such as a lack of clarity on their life insurance options or concerns about premium costs.
Financial institutions can best reach Generation Z consumers to gain share of mind and wallet by clearly communicating affordable life insurance that grows with each life stage.
Create awareness for Generation Z shoppers that – the opposite of their auto insurance – life insurance rewards youth with higher underwriting approvals and lower rates that can be locked-in for many years or a lifetime.
Effective marketing both educates and motivates by translating complex policy features into what’s-in-it-for-me benefits. This empowers informed decisions to self-select value propositions that sync with budgets and needs by:
- Offering a targeted range of choices at the initial transaction, from lowest conquest price to highest aspirational coverage
- Keeping entry level coverage aligned with growing income through upsells, cross-sells, and convertibility.
Our research shows that Generation Z consumers prefer to discuss their life insurance choices with a person before purchasing, even when the initial decision process runs through digital channels.
Dismiss the stereotype of younger consumers who are consumed with digital media. Create 6 multi-media touch points along their life insurance journey.
- Integrate emails with direct mail to drive leads to your platform and add tangibility to an intangible promise of protection
- Offer great ease of pre-purchase online comparison shopping at the quote stage
- Show website answers to frequently asked questions that deliver facts and debunk myths
- Leverage digital educational content, blogs, and customer ratings that can be stronger influencers than A.M. Best or financial ratings alone
- Engage through chat, text, or phone options that put the customer in control of the conversation
- Then segue to offline agent engagement for qualifying and purchasing.
Now is the moment to seize for financial institutions who want to build deeper relationships with these desirable and receptive consumers. Message relevant coverage in appealing media – speaking to their strong needs for simplicity, security, and affordability – to move those Generation Z young adults from intent and interest to life insurance engagement and purchase.
This content originally appeared in PIMA's Insights Magazine, 2021, Issue 2