Gen Z will benefit more from income protection than any other age bracket

Since faring the worst of the pandemic, attitudes towards protection policies have changed across the generations. We’ve seen an uptake in interest from younger earners such as Millennials and, in particular, from Generation Z (those born after 1997). 

Entering the job market in the midst of a global pandemic has been unkind to this generation, with many of them now looking to build their financial futures and achieve financial independence as quickly and as securely as possible. 

Unbeknown to 50% of this demographic, getting income protection in place as early as possible is one of the most effective and affordable ways of safeguarding their financial futures, as they strive to make their dreams become reality in a tumultuous economic landscape. 

Here’s how to engage this age group on the benefits of income protection and why this product is perfect for Gen Z’s specific needs. 

A familiarity with digital tools has lead to a “go-it-alone” attitude 

Statistically Generation Z are the most comfortable when it comes to using digital financial services and managing their money online. They are also one of the most proactive age groups when it comes to finding the right services for them. 

Known as “digital natives”, it’s likely that this age group will obtain their own research online before approaching an advisor, as well as already doing the majority of their banking purely online - in particular with challenger services on mobile phones, and avoiding services provided by typical High Street banks.  

The risk is that through this independent research, they could become overwhelmed with options, or make decisions purely based on their independent research, rather than through the broader perspective an advisor might be able to offer. Protection policies are a long-term commitment and it’s essential that younger savers find the best options for their particular set of circumstances or risk leaving themselves vulnerable with inadequate or inappropriate cover.  

As a distributor, make sure your digital services are up to scratch and that you provide a clear user journey to demonstrate the value in protection products and to educate younger clients as they do their own research. This educational material should focus on explaining how this complicated product works and the long-term value within it, which might not be apparent to a client who is making financial decisions within a crowded and oversaturated marketplace. 

Job instability is a reality for young savers 

The reality for Gen Z is an incredibly crowded and competitive job market. Due to the ramifications of the pandemic, they’ve entered a hiring environment based on a boom-and-bust model, directly affected by fluctuating government lockdowns. Plus, as the newest employees to many companies, it’s often this age group that bears the brunt of mass layoffs or redundancy, as companies struggle to keep their heads above the water when the going gets tough. 

Knowing this as an advisor, it’s your responsibility to provide advice with this wider context in mind, and to consider how income protection might offer some security in such a turbulent landscape. Income protection can offer an affordable way for your client to access long-term financial support should they have to stop working due to illness or circumstance. This support not only benefits your client’s financial well-being but also gives them peace of mind in an unpredictable job market. 

Getting onto the property ladder is a key concern 

For Gen Z, one of the most noticeable differences between their financial aspirations and that of other demographics, is their desire to get on the property ladder as soon as they can. Owning your own home is one of the most stable ways of managing assets and obtaining financial independence. This aspiration reflects the turbulent reality many earners have had to face over the last few years in particular for young workers or graduates trying to lay the foundations of their financial future. 

Getting income protection will help younger learners live up to their financial commitments and hopefully continue to save to achieve goals like owning their own home. Promoting income protection online and linking it home ownership on platforms like social media, can help to increase awareness of this option within the Gen Z age group, whilst also sparking intrigue to help young earners in their own research. It’s likely this demographic will only get in touch with an advisor in relation to managing a new mortgage, so make sure your user journey and subsequent advice explicitly makes this link.

Fairing bad weather for a brighter future

As one of the most motivated and active age groups when it comes to managing their finances, Generation Z are hungry for information on how to make the most from their money with financial independence at the heart of this desire. As an advisor it’s crucial to understand how income protection can greatly benefit this demographic of earners and through the use of digital tools and open information, how we can help more young people protect their financial futures from the word go.