Monday, January 25, 2016

Why Insurance Professionals Should Consider Targeting Millennials

Millennials are an interesting segment of the insurance market due to their unusual health care purchase behaviors. Their methods of information consumption and decision making has understandably been affected by the technology and conditions of their generation. So why should the healthcare industry focus their energy on this generation?


DEMAND
This year marks the first year millennials outnumber the Baby Boomers (by 7.7 million) according to the United States Census Bureau. Aside from sheer numbers, this is a relatively unpenetrated market. As of 2015 17% of Millennials did not have health insurance; compared with the 12.3% uninsured rate in 2015 for ages 18-64.
As Millennials begin to turn 26 and age off their parents’ plans, the demand for individual ACA plans will rise. The generation’s stubbornness in their adoption of healthcare due to high costs and belief that they are too healthy to need it, seems likely at an end as the fee for not having a QHP rises. This year the penalty was raised to 2% of a household annual income or $695 per adult. If this trend continues, the penalty will eventually become greater than the cost of care, and will influence the decision of Millennials to purchase health care.


EASIER FASTER COMMUNICATION
In the past, a salesperson or insurance agent was accepted as an expert, and face to face contact was critical. Millennials however are more wary of sales agents, and are instead determined to draw their own conclusions by speaking to peers and researching information online. This may make an independent insurance agent’s job a little harder in that their expertise is no longer taken at face value, and instead questioned and fact-checked. However, the pros to this new way of consuming information is that many Millennials can be reached all at once by a strong digital presence. In the past, you could spend hours with 1 client going over painstaking details. Today, you can keep a blog or a website and update information once that will be seen by countless prospects.  


BETTER CROSS-SELLING PROSPECTS
Millennials are excellent candidates for supplemental plans such as telemedicine, accident plans, and hospital indemnity plans due to their unwillingness to spend on Gold or Silver plans. Instead, they often opt for high deductible plans due to their good health and youth. ZocDoc found that 51% of millennials see a physician less than once a year, and are more likely to be interested in telehealth (74%) to avoid copays and time consuming trips to the doctor. More importantly, due to their experience with recession during 2009 as well as high amounts of student debt, Millennials are proving to be apt financial planners. In fact, 55% of millennials say that paying off student debt is their biggest financial concern. According to US News, “research finds that macroeconomic conditions in childhood and young adulthood are important determinants of future earnings and financial behavior”. This can be seen in the trend of savings seen in this generation as 52% of millennials have put money into savings, and 72% are confident they will be able to save enough to retire comfortably. This means that the millennials’ understanding of financial hardship and the need to plan for the future is very mature, making them prime prospects for such products as annuities, life insurance, and long term care insurance.


In conclusion, the Millennials are a generation with a variety of needs and an affinity for new ideas and healthcare alternatives. The educated nature of this generation as well as their early experience with recession and debt makes them excellent financial planners and information seekers. For information about our many supplemental products visit our website!

Daniela Levi
Marketing Manager for Ancillary Sales

1 comment:

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