Jenny and Martin Benton, both in their late 60s, aren't quite ready to retire. Jenny is working almost full-time as a designer of children's dresses. Martin, a medical writer, still takes on a few free-lance assignments.

These New Yorkers are working partly because they need the money and partly because they wish to stay active.

The Bentons are fairly typical of the millions of empty nesters in the United States. Retired or approaching retirement and with no dependent children, such couples shape up as a major target for bank marketers of insurance products.

The number of such couples is rising steadily. They total 17.8 million households this year, representing 17.6% of all households, and will be swelling to 19.6 million, or 18.1%, in five years as the baby boomers move into the 55-plus age brackets.

David Kaytes, a managing vice president with First Manhattan Consulting Group, identified three product areas that he says make sense for empty nesters such as the Bentons.

"They need products that could help stretch assets," he said. "One is an annuity, where they buy a future income stream. A second, for people in their fifties, is long-term-care insurance. But for people in their sixties or seventies, this gets too expensive.

"Third is an estate planning product. They are in the stage of their lives where they may have more money than they need and need to know how to pass it on to their heirs with a minimum of tax impact."

Life insurance, he says, isn't a prime product for the empty nesters, simply because their principal beneficiaries are no longer in the household.

But Michael D. White of Michael White Associates, Radnor, Pa., has a different take on life insurance for empty nesters. "People have done so much refinancing of their mortgages that many still have considerable mortgage debt" even in this late stage of their lives, he says.

The ability to pay off the mortgage upon the death of one of the household members could go a long way toward keeping the other in the house or guaranteeing an inheritance to their children, Mr. White points out.

The Bentons are fortunate in having an inexpensive rent-controlled New York City apartment, so a mortgage is not an issue with them. But they must make decisions about deploying their retirement funds, something they have put off while they still have employment income. And they know some questions must be answered soon.

They have already put some money into annuities and are considering increasing their investment. But they are not quite sure where they can get the best, most objective information.

And therein lies the snag for banks that want to market insurance products to empty nesters. Can they parlay their close relationships with such customers into effective sales of insurance products that fill their specific needs?

Jack D. Cussen, senior vice president of financial services at Summit Bancorp, Princeton, N.J., says his bank is not yet marketing to this segment but hopes to do so in the future. "They are ideal candidates for long-term care insurance. We're looking for insurance products that will fit their specific needs, and also at variable annuities, an investment product that makes a good deal of sense."

Mr. Cussen also says empty nesters who are business owners are good candidates for some kind of business succession coverage.

The Bentons have not decided on their ultimate objectives. How much of an estate, if any, do they want to leave to their two grown children? How much do they expect to spend once they are fully retired? How will they manage their health-care costs? Anyone who can help them with these decisions stands to get their investment business.

Mr. Kaytes is not impressed by banks' marketing performance so far. He says they have acquired agencies that may be effective target marketers, but he is unable to single out a bank that is effectively marketing insurance to empty nesters.

"You have to start with understanding customer needs," he says. "You need to identify a product you could source from a third party. Then the trick comes with doing something to that product to make it more attractive, to give the customer a reason to buy it from you rather than another source." An example, he said, is offering automatic deduction of the periodic premiums from one's bank account.

Mr. White again has a different spin: "This is going to be an older and wiser customer base. Your materials should be education-oriented. Instead of harping on products, you should be doing seminars in safe, well-lit locations or at appropriate daytime hours."

The Bentons might well be receptive to such efforts, but have received no invitations. And while Mr. Benton has learned from his son to use the Internet, he would not think of surfing to find insurance products.

Many community banks have adopted programs aimed at seniors. Charlotte State Bank, Port Charlotte, Fla., for example, recently started a social and travel group for people 50 and older. Charles G. Brown 3d, president of the $50 million-asset bank, says, "They've gotten more comfortable with the bank in a social setting so they're more likely to use the bank in a professional setting," Mr. Brown said.

But the weakness of such programs, the consultants point out, is that they are not directly geared to insurance sales but rather to a whole array of offerings, including deposits and investment products.

While the empty nesters are attractive as a demographic group, most observers expect only slow growth in the amount of marketing that banks target to couples like the Bentons from among their own customers.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.