As younger generations enter the workforce, advisors should look to millennials and Gen Z — especially those with income-earning career potential of $100,000 or more — as promising sales targets. Understanding the needs of your client, regardless of their age, is the first step toward starting a conversation about the benefits of income protection. It's a common misconception that individual disability insurance (IDI) is only valuable for professionals who are further along in their careers.

Understanding the next generation of IDI purchasers Everyone has their own income protection needs. Millennials and Gen Z have unique characteristics that impact the way they approach insurance and disability. Millennials are those born roughly between 1980-1996, including new college graduates as well as established career individuals. Millennials are currently navigating some of life's major milestones for the first time: marriage, home-buying and, for some, entering the workforce.

Comparatively, Gen Z is the generation born between 1996-2010, with some graduating from college and entering the workforce next year. Sometimes called "digital natives" or "centennials," Gen Z is the first generation to not know life before the internet. As such, they are extremely tech-savvy, and are often seeking out careers that meet their skill sets and earning potential.

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Many young professionals have already made significant investments in their future and are pursuing high-earning careers that can help them move away from home, repay large student loan debts and build sizable nest eggs. What these age groups may not know is that protecting future income is critical to ensure they can accomplish their financial goals in the event of a disability.

As millennials ground themselves in the workforce and Gen Z joins them, it's important to educate both generations about the importance of IDI. The following reasons highlight why Gen Z and young millennials can benefit from income protection policies early in their careers.

IDI can help millennials and Gen Z protect their incomes

All generations share the belief that saving money is important. Younger generations as well as older groups should look to protect their future in a variety of ways, including safeguarding their income — and ability to save — through IDI. While millennials and Gen Z are in their prime to purchase an IDI policy, older generations like Gen X also have the opportunity to purchase policies.

Consider this a valuable selling point for those who value having a long-term financial plan to prepare for the future. After all, it makes sense to buy an income protection plan before disability occurs, rather than after.

IDI offers unique features for millennials and Gen Z Because many millennials and Gen Z employees are near the start of their careers, they should consider policy features that can grow with their evolving needs. The following are strong policy features that young professionals should look for in an income protection policy:

1. Opportunities to increase coverage. Riders that increase monthly benefits to keep pace with salary increases are a must for professionals early in their career. Some increase riders provide annual benefit increases of a set percent a year for a set period of years. IDI policies with features to increase coverage in the future can protect one's growing income — helping ensure adequate coverage should disability happen.
2. Strong definition of disability. For many professions, a strong definition of disability can help earners protect their income should disability occur. For specialty professions, such as trial lawyers and some doctors, the ability to select an own occupation rider can protect them should they encounter a disability that prevents them from doing their current job but allows them to do related work. Remind younger clients that career trajectories are long and purchasing a policy with an occupation rider is a sound financial decision that accounts for the unexpected and provides coverage and flexibility in the future.
3. Student loan riders. Student loan costs for millennials and Gen Z can be stressful, and becoming disabled may prevent potential high-earners from paying their student loans. Fortunately, should a client experience total disability, a student loan rider may cover some or all student loan payments, up to a maximum period. This policy feature is especially pertinent for Gen Z and young millennial clients who may have large student loan debt amounts.

Younger clients have budding families to protect Many millennials and Gen Zers will soon navigate a host of familial milestones, including having children and taking care of aging parents. As younger generations look to the future, they should consider the possibility of future family obligations (whether that is taking care of a parent, spouse or child), and how IDI can help them prepare.

Some IDI plans can provide the valuable income protection needed should an employee need to take time away from work to care for a family member with a serious illness or injury. For instance, some policies allow workers to take time off to act as a family caregiver and get some coverage for lost income. Inform your clients that purchasing an IDI policy earlier can help them provide for their loved ones when they need it most.

The next generation of IDI policyowners

By offering valuable income protection, unique features and more, IDI can help millennials and Gen Z set their careers, families and lives on the right path. As an advisor, your sound financial advice can help provide the next generation of high-earning professionals with the tools they need to make the right income protection decision based on their unique needs. In turn, you'll receive the benefit of increasing your sales pool as a result of exposing a new population of future earners to the value of IDI.

Chris Coy is a regional director at The Standard. Chris works with producers and general agents across the country to identify sales opportunities for fully underwritten and guaranteed standard issue individual disability insurance. He works to educate the distribution field about advancements in technology, underwriting and sales programs that make IDI easier to purchase and faster to issue. Chris has a bachelor's degree from Portland State University, received his CLU and ChFC designations from the American College, and is L&H licensed in Oregon. He can be reached at [email protected].