Millennials officially surpassed baby boomers in population in 2019. But seniors still account for a large percentage of the overall population.
In fact, recent census estimates predict there will be 72 million baby boomers in America in 2019 versus 73 million millennials, according to Richard Fry, senior research associate at Pew Research Center. This means the boomer demographic is one that independent agents still need to pay attention to.
With that said, here are four conversations to have with older customers that address their specific needs as they move into retirement and beyond.
1. Home Equity
Senior home equity has hit record numbers in recent years, reaching reached $6.9 trillion in the second quarter of 2018. This was $130 billion more than the prior quarter, writes Alcynna Lloyd, reporter for HousingWire, a digital news source for housing market, real estate and mortgage trends.
This means tapping into home equity to pay for health needs and elder care is a viable option for many baby boomers. One of the primary ways they can go about this is with a reverse mortgage, a type of loan specifically designed for senior homeowners.
“A homeowner who is 62 or older and has considerable home equity can borrow against the value of their home and receive funds as a lump sum, fixed monthly payment or line of credit,” explains financial journalist Amy Fontinelle. “Unlike a forward mortgage — the type used to buy a home — a reverse mortgage doesn’t require the homeowner to make any loan payments.”
This can make a reverse mortgage ideal for cash-poor baby boomers who have plenty of home equity and think they’ll need to tap into it at some point during retirement, adds Kathy Kristof, author of “Investing 101.”
For those who decide to go this route, you’ll definitely want to educate them on reverse mortgage insurance, which ensures the money is disbursed based on agreed-upon terms under the loan. This provides homeowners with peace of mind that they’ll receive their money even if the lender goes out of business, says Michael G. Branson, CEO of direct lender All Reverse Mortgage.
2. Recreational Pursuits
And let’s not forget about the more fun side of reaching this age — recreational activities. It’s common for retirees to explore new hobbies they didn’t have time for in the past, and they may end up trying new things.
“Many of these personal pursuits will require specific insurance policies,” insurance writer Michelle Longo points out. “Travel, valuable collections and boats, for example, can all be covered by insurance policies that will protect the fun things life has to offer after a lifetime of work and raising a family.”
For those who want to see the world, you might recommend travel insurance. According to insurance review site Squaremouth, this protects prepaid and non-refundable travel expenses when a person has to cancel their trip due to issues like injury, illness or severe weather. It also covers emergency medical expenses that occur while traveling, as well as lost luggage.
If they have expensive hobbies like winemaking, woodworking or classic car collecting, there’s hobby insurance. This offers in-depth coverage on things that standard homeowners insurance won’t and should protect them in the event that high value property is lost, stolen or destroyed.
Or maybe your customer has a winter home in Florida. Having the right combination of homeowners insurance, flood insurance and wind insurance can help protect their property against hurricanes, says consumer decision resource ValuePenguin. In this case, you could recommend particular policies that may not be on their radar but will offer the exact level of coverage they need.
3. Later-in-Life Eventualities
Even if life and health policies are outside the scope of the services P&C insurers provide, you can still serve as a trusted advisor by referring your customers to colleagues who do provide these kinds of insurance.
With aging customers, issues like end-of-life planning and long-term care are important to tackle. Life is unpredictable, so giving some thought to these areas can provide seniors with peace of mind that their affairs are in order and their loved ones will be taken care of regardless of what happens, notes the team at SeniorLiving.org.
Given the sensitive nature of this topic, it’s a conversation you need to broach carefully and with tact. Mistie Carter at New Horizons Insurance Marketing, says most baby boomers respond to emotion, so it’s smart to initially focus on how insurance coverage will make them feel rather than the technical aspects of its features.
Long-term care involves providing assistance to individuals if they become physically or mentally unable to perform routine daily activities. It’s important for seniors to know that with the right insurance, they’ll be covered financially in this type of scenario.
And that’s where your referral to a long-term care insurance provider comes in. The policy can assist them with the cost of care if they have a chronic medical condition, disability or disorder explains personal finance writer Barbara Marquand. Whether it’s in a person’s home, nursing home or assisted living facility, most policies will reimburse seniors for care.
She also notes that baby boomers shouldn’t wait until it’s too late to purchase coverage because they won’t qualify if they already have a debilitating condition. This doesn’t mean that you should use fear tactics when suggesting long-term care insurance, but it’s certainly something to point out. Not only can being proactive help protect their savings, it gives them access to a higher quality of care.
Besides that, many seniors will be interested in robust health insurance. People are living longer than ever, says the World Health Organization, and good health impacts quality of life directly. Having comprehensive health insurance therefore is vital for baby boomers and another potential recommendation for independent agents make.
“Use the history and experience of the baby boomer generation to illustrate the need for health insurance and solutions that will keep them living the energetic, active lifestyle they have worked hard to create,” says the team at health insurance software platform Quotit. “With the right healthcare insurance that meets their personal coverage needs, baby boomers can have many years ahead to enjoy.”
4. Post-Retirement Business Interests
Many baby boomers are interested in business projects too. These might range from investing in a family member’s business to turning a handiwork hobby into a side business of their own.
Or maybe they can use the knowledge and skills they’ve acquired over the years to be an advisor or consultant. Derek Sall, owner of LifeAndMyFinances.com, says advising and consulting are two particular areas where seniors often thrive and where they can use their wisdom to help others get ahead.
And of course, it’s important to insure businesses, which is another area where independent agents can be of service. Let’s say you offer a wide range of commercial lines, including policies for small-scale contractors. If someone wanted to start an interior decorating business where they act as a design consultant, you could provide them with professional liability coverage, which would help cover any legal costs that may result from error, failure to perform or damages.
Even if it’s a hobby that a senior uses as an extra income source, it’s wise to insure that as well. DIY crafts like candle making and jewelry making are popular hobbies that can end up becoming legitimate DIY businesses, says Braveen Kumar at Shopify. So in this type of situation, a person may be interested in hobby insurance in addition to a commercial line.
Cater to Your Offerings to Seniors
A lot of energy now goes into reaching younger generations like millennials, which is understandable. But don’t forget about the baby boomers. They still account for a large portion of insurance customers and have more spending power than any other generation to date, says the team at Precision Senior Marketing.
As an independent agent, knowing those areas of insurance coverage most pertinent to seniors allows you to serve them best. Focusing on the ones highlighted above will ensure you’re able to provide this demographic with the coverage they need and can be instrumental in building lasting relationships.
Images by: fizkes/©123RF.com, stockbroker/©123RF.com, stockbroker/©123RF.com