“Disruption” may be one of the most overused buzzwords inbusiness today. However, with 10,000 baby boomers turning 65 everysingle day, there may not be a more appropriate way to describe thedemographic changes that life insurance brokers must address.

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“The challenge is that brokers always need to educate the nextgeneration about the benefits of having a life insurance policy,”said Michael Barry, vice president, media relations, for theInsurance Information Institute (III) in New York City.“Opportunities will arise, however, as younger Americans advance intheir careers, start families and realize that their beneficiariesneed the financial protection life insurance provides.”

Continued success in a fast-changing workplace environmentrequires brokers to understand three things: current demographictrends; how these trends affect their industry; and how they canadapt to turn challenges into opportunities.

Graying population

The baby boomer generation, which has been prominent since WorldWar II, is quickly giving way to millennials. Boomers now accountfor about 28 percent of the population. The oldest boomers turned65 in 2010, and the youngest will reach that age by 2029. In 35years, the youngest surviving boomers will be 85 or older. Thissegment of the population will have grown by 230 percent, while thegeneral elderly population will have grown by 120 percent.

The post-war spike in family sizes has been followed by asignificant decline. The average number of children per family hasdropped from 3.6 in 1960 to 2.1 today, meaning fewer workers aresupporting more retirees. The number of working-age people perretiree declined from 5.6 in 1960 to 4.6 in 2010, and it isexpected to drop to 2.8 by 2030. As a benchmark, Social Securitywas enacted at a time when there were 10 workers per retiree, andMedicare and Medicaid began when the ratio was more than5-to-1.

Currently, more than 83 million millennials, born between 1982and 2000, are taking the place of boomers in the workplace. Thisgroup accounted for 25 percent of the population last year, makingit the largest demographic age group, according to the U.S. CensusBureau. This means one of every three potential life insurancecustomers in the workplace is a millennial.

Meeting the challenge

Two interpretations of current trends can lead to trouble:focusing too heavily on proven strategies that have worked withboomers, or adjusting to millennials at the expense of otherexisting clients. Brokers can navigate this brave new demographicworld successfully only if they continue to serve the needs ofboomers while also adapting their products and services to thechanging demands of millennials.

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Remember, boomers are getting older, but they are not ageneration to exit the stage quietly. They remain the wealthiestgeneration in history, and many are still working to maintain theirlifestyles or prepare for retirement. More than 75 millionAmericans born between 1946 and 1964 are still in the workforce,according to the Pew Research Center Fact Tank.

Boomers are looking for insurance solutions that balance theircurrent needs with the futures needs of their heirs. In a recentinterview, LIMRA President Bob Kerzner referred to this as a changefrom “protect my family in case I die early” in the 1960s to“protect me financially in case I die late” today.

Market options now include accelerated benefit riders forchronic illness, which allow policyholders to access cash value inthe policies to help pay for assisted living, nursing home care,adult daycare and more. Longevity riders with some universal lifeinsurance products can provide guaranteed income in retirement.These riders transform life insurance into a solution that'sintended both to meet a family's financial needs if the worstshould happen, and to provide a source of retirement income if thebest should happen.

But brokers must also address the emerging needs of millennials.On the LIMRA website, Kerzner says he expects more milennials tostart purchasing life insurance in the next five to 10 years, withcarriers streamlining products to make them easier for brokers tosell. Instead of needing medical tests and waiting 30 to 90 days tobe approved by an insurer, for example, consumers can get immediateapproval through some companies by simply answering a few questionson a form.

Younger customers also have a different preference for benefitdistribution.

“A LIMRA study released in June showed consumers under age 40would prefer to receive life insurance benefits as a monthly incomerather than a lump-sum payment,” Barry says. “In a study on lifeinsurance product designs, 4 in 10 consumers under age 40 prefer amonthly income benefit, while approximately 30 percent favor alump-sum payment.”

It would be difficult to overstate the impact technology has hadon the way millennials find information and make decisions.“Brokers need to go where the potential customers are, and that, inmany cases, means using social media, although face-to-facemeetings will always remain an important part of the salesequation,” Barry says.

Prosperous future

Demographic trends point to the continued importance of theworkplace as a sales channel. Worksite life insurance sales totaled$6.89 billion in 2014, a 3.7 percent increase from the previousyear, according to III research.

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“Brokers may want to stress to employers how, for some of theiremployees, a group life insurance policy may be the only source ofincome replacement for the employee's beneficiaries,” Barrysays.

Today's brokers can offer a much broader range of products andservices than in the past. A bundle of coverages tailored toindividual needs has great appeal to a generation that isaccustomed to an abundance of choices in other areas of life.

Regardless of age, all consumers have a universal need toprotect against risk. Brokers can continue to thrive by helpingthem understand and manage these risks, and by positioningthemselves as providers of effective solutions, not simply productsand services.

Demographic disruption is well under way in group insurancesales. How brokers understand and approach it will go a long waytoward determining how it will affect their business in the future.

Life insurance is a low priority

Although experts caution against generalizations, severalconclusions can be drawn about millennials and their attitudesabout life insurance:

• Many have already fallen behind. Seventypercent don't know how much they should save for retirement, andonly 40 percent are saving at least 10 percent of their income,according to a 2015 study by the Life Insurance and Market ResearchAssociation (LIMRA).

• Planning is not a priority. For manymillennials, long-term financial planning takes a back seat topaying down student loans, getting married, starting families,taking on mortgages, and other pressing needs.

• Strategies are shortsighted. Fifteen percentconsider winning the lottery to be a “viable retirement strategy,”while 11 percent hope for monetary gifts to see them through theirlater years, according to a study last year by the InsuredRetirement Institute and the Center for Generational Kinetics.

• Life insurance is lagging. Purchasing lifeinsurance is a low priority, recent LIMRA research found. Althoughmost millennials believe they need to have more coverage, fewerthan 1 in 5 are “very likely” to buy it. Sixty percent place ahigher priority on paying for mobile phones, internet, cable, or avacation. In a study conducted on behalf of Colonial Life &Accident Insurance Co., employees said they are more likely tospend an extra $200 on an electronic device or dinner out thanapplying it toward an insurance policy.

• Homework is out. In the same study, moremillennials would spend several days researching a new car purchase(77 percent) or vacation destination (70 percent) than researchinga life or health insurance purchase (67 percent).