How to reframe life insurance for younger clients who want the benefits now

Following a recent report that highlights how younger generations want something different from life insurance than has generally been the norm, how can advisors adapt their approach to help these clients see the benefits? And what about older clients who no longer want to continue their policies?

Bryan Nicholson is executive director of the Life Insurance Settlement Association and says the conversation around life insurance needs a reset, especially for Millennials and Gen Z. And he’s been sharing some insights with InvestmentNews.

“Younger generations are buying life insurance at lower rates because they often don’t see the product as a versatile financial asset,” Nicholson said. Many assume it’s “only to replace income after death,” which feels irrelevant for those who are “single, child-free, or postponing major life milestones.” Add in student debt, high housing costs, and the drive to build savings or investment portfolios, and “life insurance falls down the list.”

Nicholson believes the industry’s best opportunity to engage younger consumers lies in the concept of living benefits or riders that offer value during a policyholder’s lifetime such as living benefits such as riders for chronic or critical illness, which shifts life insurance from being perceived as a distant, death-only product to something useful in everyday financial planning.

“Some life insurance policies are now structured with subscription-like flexibility in premiums, while others highlight their role in wealth-building rather than simply protection,” he says. “These innovations align with the broader ‘policy as asset’ framing found in the policy contracts, which is likely to resonate with Millennials and Gen Z who want products that adapt to their evolving financial goals.”

Life settlements

Beyond attracting younger buyers, Nicholson sees increasing interest among older policyholders in the life settlement market - selling policies for fair market value instead of lapsing or surrendering them.

“Life settlements have become an important liquidity option for seniors who no longer need coverage or cannot afford premiums,” he explains, noting that proceeds “are frequently used to fund long-term care, in-home support, and medical expenses,” reducing pressure on investment portfolios.

Nicholson says that life settlement consumers received approximately 6 times the cash surrender value of their life insurance policies in 2024, with the year showing strong numbers of “approximately 2,700 transactions and over $600 million paid out to consumers.”

And with further growth expected, the simplicity of the process is clear.

“The process itself is consumer-friendly: no medical exam is required, policies are appraised, and competitive bidding among institutional buyers ensures fair market value,” he says.

The life settlement market is regulated in 43 states, covering about 90% of Americans. Nicholson pointed to these frameworks as essential to building credibility by typically requiring disclosures about valuation, bidding, and fees.

“Clear disclosures about valuation and fees, competitive bidding processes, and plain-English explanations build trust and make life insurance more approachable.” Advisors who present policies as “an asset with options,” he added, will connect better than those using “jargon-heavy product pitches.”

Nicholson says life insurance should be a visible, dynamic part of every client’s portfolio.

“Advisors should position life insurance as a long-term financial asset rather than a static product,” he says. This includes explaining that policies “can be kept, adjusted, exchanged, or even sold later.”

He urges advisors to adopt “a fiduciary mindset and present all potential options, including life settlements.” Real-world examples, Nicholson noted, “where policies later funded health care, debt repayment, or family support,” help younger clients see tangible, lifetime benefits.