The freelancing boom may change how you buy life insurance

Younger generations seem to have a knack for disrupting the status quo, and life insurance may be next on the list. As Generation Z and millennial workers challenge the concept of a traditional career and drive an increase in freelancing, the role of workplace group life insurance in long-term financial plans is likely to change.

Freelancers understand that they need to take 100% responsibility for their finances, says Jessica Lepore, founder of Surevested, a New York-based life insurance agency. “It’s not all packaged like if you were to work for a corporation.”

LESS RELIANCE ON GROUP LIFE POLICIES

Many people in their 40s and 50s depend on life insurance provided through an employer, says Grant Dunn, vice president of financial services at Lakenan, an insurance brokerage in St. Louis. But younger generations prefer to look for coverage outside the workplace, he says. Last year, life insurance application activity grew more than twice as fast for Americans 44 and younger compared to those 45-59, according to MIB Group, an information-sharing service for insurers.

“They’re going more to outside markets rather than just trusting what they have through their employer, because they know that their employer is going to change a lot in the next 30 years,” Dunn says.

Younger workers typically do not stay at jobs as long as older workers, the most recent data from the Bureau of Labor Statistics shows. In January 2020, median job tenure was 2.8 years for workers 25 to 34 years old, compared to 9.9 years for workers 55 to 64.

Workers can’t always convert group life to an individual policy to avoid losing coverage when they leave a job. “What I would suggest to millennials that plan on job-hopping around is just get it outside of your employer so you don’t have to worry about...