They’re young, they’re hip — and they think you’re a little bit sleazy. Find out what your youngest prospects think about the insurance industry.
Generation Y — also known as echo boomers, children of the baby boomers. These young adults, born between 1978 and 1994, are settling down on their own, starting their first jobs, buying homes, getting married, and even having children.
They have their whole lives ahead of them, which means that now is the perfect time for an insurance advisor to build a long-term relationship with them.
But that type of relationship might not be as easily forged as it seems. According to the 2009 Brokerage Study conducted by Agent Media, the publisher of the Agent’s Sales Journal, exactly 0 percent of producers are primarily selling policies to consumers in their 20s — the age bracket that makes up the majority of Gen Y.
Why are so many agents ignoring this demographic? Perhaps it’s because they’re so used to selling to baby boomers and seniors that they simply aren’t comfortable with Generation Y. They just don’t know enough about the group, its wants and needs, and what its members think of the insurance industry.
To help bridge the understanding gap between producers and their younger prospects, the Agent’s Sales Journal spoke with five members of Generation Y. We asked them what kind of insurance they have, what their retirement plans look like, and, most importantly, what they think about the insurance industry. Read on to glimpse inside the heads of Gen Y-ers — your hottest untapped market.
Name: Parker Arnold
Age: 29
Family status: Married; no kids
Occupation: High school English teacher
What kind of health insurance do you have? I have health insurance through my work. It’s a new Humana HMO Select plan.
Do you think your coverage is sufficient? Would you ever consider supplementary coverage? I have to say that I have never really thought about that. I am fairly pleased with the amount of coverage, but the price is a different issue. I have to pay for mine. Supplementary coverage has never been a need of mine.
Do you have any retirement savings plans? I do not. I am definitely going to, but I just wasn’t sure if I was going to stay at the school system that I am in, so I didn’t want to do anything through them. I think it is a necessity, but it is hard to think that far ahead, even though it will sneak up on me.
What are your impressions of insurance agents? I do not have any experience with insurance agents other than Allstate automobile agents. My overall impression is a negative one with them, mostly because most people never use their insurance (or hope they don’t) and, in my experience, all of those agents have acted like they were doing God’s work. I met with an automobile agent when I was young, first driving. It was an outdated office, smelling of bad air fresheners and day-old coffee. When quoting me the price, it was way more than a high school student could pay, and he tried to “give me a break” by giving the good-student discount (which amounted to roughly $7 every six months). I have done all of my insurance shopping online since that day.
What do you think about the insurance industry as a whole? I think that the health insurance game is rigged. I think that everyone knows there is something wrong with the system, and if I were a smarter man, I would lay out a plan right here. But with doctors prescribing everything under the sun, including the newest pill that their pharmaceutical rep has paid them to try, and then turning the inflated cost in to insurance companies, the insurance companies will never give the healthy population the break they deserve. But now I sound like Bill Maher. Sorry.
Name: Anna Brittain
Age: 23
Family status: Married; no kids
Occupation: Office receptionist
What kind of health insurance do you have? I have a sponsored plan at work.
Since you get your policy from work, what is your plan if you lose your job? Would you ever consider working with an insurance agent? I haven’t really thought about it, but I suppose I would look into an individual plan or have myself added to my husband’s health plan. It’s kind of sad, really — both of us have single plans with our respective employers. But if one of us tries to open a family plan, our monthly payment would almost quadruple. So we’ve been married for almost two years and we’re not even on the same insurance plan. It’s either single or family-of-four plans — why can’t there be a family-of-two plan? Why should I pay the same amount a month in insurance as my coworker, who is married with two children?
Do you have any other kinds of insurance or any retirement savings? I have a pension plan and a Roth IRA. My husband and I are looking into life insurance since we bought a house last year, but we haven’t really done any research yet. It’s just kind of expensive, and we’re still trying to get used to having a mortgage payment. So cost is a primary factor. The economy hasn’t been kind to anyone.
When you do decide to pursue life insurance, do you think you’ll ultimately work with an actual agent, or just buy online? We have a financial planner who is also a life insurance agent. We’ll go through him. He’s been a family friend of my husband’s since my husband was in grade school. No matter what, we’d use someone whose opinion we trust, because there are a lot of sharks out there.
What is your general opinion of insurance agents? I grew up in a small town, and insurance agents always bring to mind the patriarch of this one particular family. Every small town has one: moneyed, charismatic, and superficial. Growing up, he was a big fish in a small pond: quarterback, SGA president, prom king — the whole 9 yards. He went away for a few years and had his reality checked, but instead of growing and learning about himself, he chose to move back to our small town, marry his high school sweetheart, and started selling life insurance. If it wasn’t life insurance, I think he would have probably sold used cars. I know it’s painting with a broad brush, but his life revolved around his business, and he never put a good taste in my mouth.
What about the insurance industry as a whole? It makes me nervous, because there is so much fine print that I never know if or when I’m going to be taken advantage of. I wish health care was more easily affordable.
Name: Mark Courchane
Age: 23
Family status: Single; no kids
Occupation: Media consultant for a direct mail company
What types of insurance policies do you have? I own the maximum disability insurance allowed. I also own $1 million of life insurance ($150,000 permanent and $850,000 term that lasts until age 80). I also participate in the health insurance and dental plans that my employer offers.
Do you have any retirement savings plans? I have a general savings account. I have a small Roth IRA that I just initiated. I also own a few individual stocks. I was a financial representative for a year and fully bought into the idea that I have to have my own program before I can sell it to others. Retirement is, or at least should be, the goal for the working class. Without a plan, it cannot be achieved. When I originally set up my savings plan (of more than 25 percent of my income), I figured that I would be very poor, but I have come to realize that I don’t miss the money because I now see it as a bill since it comes out of my checking account every month. I think that starting young has given me a good head start.
What do you think of insurance agents? You would think that I would have a positive impression of insurance agents coming from that industry, but as a group, insurance agents are pushy. I found an agent that I really like, and he handles everything for me. I enjoy his recommendations, and respond with my desires for my future based on his guidance. However, I have found that most of the insurance agents and financial advisors that I worked with were simply out to make a buck for themselves and did not maintain their fiduciary responsibility to the client.
Can you describe your experience working with your financial advisor, and what you like about it? I meet with my financial guy every couple months to look at my portfolio and explore new possibilities. I found someone that I trust and enjoy as a friend, as well; otherwise, I would be investing on my own. He made sure that before I did any kind of investment planning, he completely understood my financial situation and did not make me a plan that I could not afford to do. He asks difficult and challenging questions, but all are pertinent to building a better livelihood for my future plans as a retired old man.
Name: Amanda Nelson
Age: 23
Family status: Single; no kids
Occupation: Student/restaurant server
You don’t have health insurance. Why not? I don’t have health insurance because I quit my job in March 2007 with hopes of finding a new job that better fit with my school schedule. Then the economy turned its ugly head, and I have only been able to find two part-time jobs that don’t offer me insurance benefits. I have looked into other options, such as privately held health insurance, but they are too expensive. The most frustrating thing is that I don’t qualify for Medicaid because I make too much, yet I am not eligible for health insurance through either of my jobs. I am worried that if I get sick, I might not be able to afford the best care. Luckily, I can afford vitamins. I did contact someone recently with Cigna to get information on health insurance. The lady was very friendly, helpful and encouraging. She gave me some great information and ideas on how to keep myself healthy as to avoid any unexpected expenses.
Do you have any other forms of insurance — life insurance, disability, etc. — or any retirement planning income? I have no retirement savings, no life insurance, or anything similar. I know I should have something, and I plan on opening an IRA within the next few months. Unfortunately, everything I have looked at so far requires a lump sum for a deposit, which is something I don’t have. I need to find one that allows me to make monthly contributions, which thus far has been a little difficult. I do have some banks and financial institutions in mind, though. I haven’t pursued any sort of life insurance yet because I never really considered it before. I suppose because I am young, I don’t think about dying or anything happening to me. I think it is time to start. As far as a 401(k) or retirement savings goes, I didn’t have the option until my last job, which I quit.”
What do you think of insurance agents? I tend to think of life insurance agents like car salesman: greasy, sleazy, all about the sales and not caring about the customer or their needs, wants, and concerns. Health insurance companies I haven’t had any problems with; they have always been very helpful to me. They have cleared up any issues I may have had.
Name: Ashley White
Age: 24
Marital status: Married; no kids
Occupation: Marketing assistant
What kind of health insurance do you have? I get health insurance from my employer. My husband has his own through his employer. We keep it separate because the individual benefits are better that way.
Are you happy with your current policy? For the most part. It’s a super-high deductible, which is no fun, but aside from that, I haven’t had too many problems so far.
Do you use supplemental plans? I have an HSA that my employer contributes to each month. I love it. I would hate the FSA because it doesn’t roll over each year.
If you get your policy from work, what is your plan if you lose your job? I’d either go without, or hop onto my husband’s insurance. With the help of my HSA, hopefully I’d be okay until I got a new job. I could never have a job without health benefits. My health costs tend to get fairly high sometimes.
Now you know what Generation Y thinks of you. But what's your impression of this younger generation of prospects? Here, insurance producers speak out on with their thoughts on the 20-something demographic.
Heather Trese is the associate editor of the Agent’s Sales Journal. She can be reached at HTrese@AgentMedia.com or 800-933-9449 ext. 225.