How Baby Boomers, Gen X, Millennials, and Gen Z Are Reimagining Coverage—and What That Means for Financial Planning and Employee Benefits

Life insurance is no longer a one-size-fits-all solution, especially in today’s multigenerational workforce. As Gen Z starts their careers, Millennials take on family responsibilities, Gen X prepares for retirement, and Baby Boomers begins to retire and focus on wealth transfer, their respective needs are influenced by their unique life stages.

Employers, financial professionals, and benefits consultants are increasingly asked to personalize coverage options to fit a wide range of needs, from student debt and mental health to retirement planning and legacy building. Understanding these generational differences is critical to offering the right mix of life insurance products, especially as tax-qualified retirement plans, like 412(e)(3) plans and Cash Balance Plans, funded with life insurance products, become more relevant for high-income earners and business owners.

Gen Z (Born 1997–2012): Protection Meets Flexibility

Gen Z is still in the early stages of their careers and financial lives. Their attitudes toward insurance and benefits are shaped by real-time concerns: mental health, student loan debt, and job insecurity. While permanent life insurance may not be top-of-mind, affordable term life coverage, portability, and access to mental wellness resources are critical. According to Mercer, nearly half of Gen Z employees value targeted mental health support as part of their benefits package.

Millennials (Born 1981–1996): Balancing Risk and Responsibility

Millennials are juggling more than just careers. Many are buying homes, raising children, and caring for aging parents. This generation tends to be underinsured, despite having the highest reported need for life insurance coverage.

According to Boston Mutual, over half of U.S. adults would feel a financial impact within six months if a primary wage earner passed away. Millennials especially benefit from affordable permanent policies with cash value accumulation, which offer both protection and potential liquidity.

In group settings, offering voluntary permanent life insurance or guaranteed-issue options can help meet their need for flexible, long-term security. Financial advisors should also highlight the role of life insurance in family financial planning, debt protection, and even future college savings.

Gen X (Born 1965–1980): Catch-Up Mode and Sophisticated Planning

Gen X often finds itself in the financial “squeeze”, simultaneously supporting children and aging parents while trying to ramp up retirement savings. This group is more likely to be interested in layered strategies that blend income protection with wealth accumulation.

For high-earning Gen Xers and business owners, Cash Balance Plans that include life insurance can be a powerful tool. These plans allow for substantial tax-advantaged contributions while incorporating life insurance coverage as part of the retirement benefit structure.

We explore this concept in more detail in our blog on Life Insurance in Cash Balance Plans.

Baby Boomers (Born 1946–1964): Legacy, Liquidity, and Exit Planning

As Boomers approach or enter retirement, their life insurance needs shift toward wealth transfer, estate planning, and liquidity to cover taxes and final expenses. Permanent policies—such as whole life or indexed universal life, may be able to provide tax-advantaged inheritance strategies.

Business owners in this generation may also be evaluating how to exit their companies. A 412(e)(3) defined benefit plan, funded entirely with annuities and life insurance, can provide guaranteed retirement income and death benefit protection, all in one IRS-approved structure.

For an in-depth look at how these plans work, visit our blog on 412(e)(3) Defined Benefit Plans.

A Personalized, Strategic Approach

Life insurance is more than just a benefit, it's a foundational element of financial security. But the needs and values of employees and clients differ significantly across generations. Financial professionals who take the time to understand these differences and offer tailored solutions like portable term plans for Gen Z, flexible permanent coverage for Millennials, and advanced strategies like 412(e)(3) and cash balance plans for Gen X and Boomers, will build stronger, longer-lasting relationships.

At RMC Group, we specialize in personalized insurance and retirement strategies that evolve with your clients’ needs. Whether you're helping a business owner maximize retirement savings or guiding a young professional toward better financial protection, we're here to support your success. Contact our office at 239-298-8210 or reach out here for more information.