Life insurance used to be something people figured out after settling down — you know, the house, spouse and two kids chapter of life. But for Gen Z and millennials, that timeline is getting a rewrite. They may not be buying life insurance in droves just yet, but they’re thinking about it earlier — and more seriously — than before. Faced with financial pressure, shaky job security and a digital world that puts everything at their fingertips, young adults are approaching life insurance with fresh eyes. What they’re looking for — and what insurers need to deliver — is changing fast.
A generation navigating financial turbulence
Millennials and Gen Zers haven’t exactly had a calm financial coming-of-age. From weathering the aftershocks of the Great Recession (2007-2009) to navigating a global pandemic and today’s persistent inflation, economic stress has been a constant backdrop. And for many, that’s shaped a mindset that’s both more cautious and more proactive.
Debt and everyday costs are hitting harder and earlier. Gen Z borrowers now carry student loan debt growing at an annual clip of 6.72 percent — the fastest among all generations. At the same time, living costs have surged. Compared to millennials at the same age, Gen Z is spending 31 percent more on housing, nearly double on car insurance and 46 percent more on health coverage. It’s no wonder financial buffers like life insurance are starting to feel less optional and more essential.
And while food and fuel costs led the inflation spike in 2022, that’s shifted. As of early 2025, shelter has become the most significant pressure point, with food still in the top three. Car insurance and medical care have also seen steep increases — all core expenses younger adults face as they try to gain financial footing. When your baseline costs are constantly climbing, having a backup plan for your loved ones starts to feel like common sense, not just financial planning.
Key statistics
- Self-reported Gen Z life insurance ownership is low at 36 percent but half say they have a need-gap
- When given a list of financial concerns, millennials express the highest level of concern on nine of 15 factors
- Over half of Gen Z and millennials overestimate the cost of life insurance at over three times its actual price
Source: LIMRA/Life Happens 2024 Insurance Barometer Study
What the pandemic taught younger adults about protection
The COVID-19 pandemic didn’t just shake up daily life — it fundamentally changed how many young people think about the future. Suddenly, the idea that “everything can change overnight” wasn’t theoretical. It was a lived experience.
For Gen Z in particular, that shift has had financial consequences. Today, one in seven are maxed out on their credit cards, and delinquencies among young adults are ticking upward. There’s a growing realization that waiting to plan for “someday” might not cut it.
Life insurance, in this context, is being reframed. It’s no longer just about preparing for the worst — it’s also about protecting the progress young adults are working so hard to make. Whether or not they have kids or a mortgage, many are looking for ways to lock in some peace of mind for their partners and families. Not because they expect the worst, but because they’ve seen how quickly things can change.
Employer benefits aren’t cutting it
Job-hopping is far more common among Gen Z and millennials than their older counterparts, and with that comes less access to long-term employer benefits like group life insurance. Gig work plays a big role in this shift: over 60 percent of gig workers use that income to supplement traditional jobs, and for 36 percent of millennials and 21 percent of Gen Z, gig work is their primary income source.
Since contract work rarely includes benefits like life insurance, many younger adults are recognizing the need to explore individual policies on their own terms.
Life insurance companies are finally catching up
One of the biggest reasons younger generations have traditionally been slow to adopt life insurance? It was inconvenient and opaque. But that’s changing fast. Online-first providers such as:
Now offer fast quotes and as little as 24-hour application turnarounds — two things that resonate with digital-native buyers.
According to a recent Corebridge study, 46 percent of millennials and 40 percent of Gen Z say they’d be more likely to buy a policy if it could be approved in 24 hours. With tech-forward platforms and no-fuss applications, insurers are starting to meet younger shoppers where they already are: on their phones.
Cost confusion remains a major barrier
Convenience isn’t the only thing that matters — affordability is just as important. And yet, many young adults still think life insurance is more expensive than it is. The Corebridge study also found that 41 percent of Americans were unsure what a 20-year, $250,000 term policy cost for a healthy 30-year-old, and another 47 percent overestimated the price — with most assuming double the actual cost.
That misconception keeps people from applying when they’re young and healthy — which is, ironically, when policies are cheapest. As education around real pricing spreads, younger consumers may start realizing just how much they stand to save by locking in premiums earlier.
Financial influencers are making once-taboo money topics more approachable — life insurance included. According to LIMRA’s 2023 Barometer Study, 81 percent of Gen Z and 75 percent of millennials turn to social media for financial advice.
Some influencers promote life insurance as an investment tool first and foremost, often highlighting cash value components or high-dollar permanent policies. But it’s important to remember that life insurance is designed to protect your loved ones — not replace your investment portfolio. Term life is often the most affordable and straightforward option for young adults, but permanent policies may be promoted more heavily simply because they likely offer higher commissions to people that sell life insurance products.
That’s why it’s important for younger consumers to balance what they learn on TikTok or Instagram with guidance from credible sources and licensed financial professionals.
Real voices: Why young adults are taking initiative
Whether driven by family influence, economic uncertainty or a shift in life, these decisions reflect a generation more aware of life’s unpredictability and the financial ripple effects it can bring.
“[My] husband took out a Hanover life insurance and disability policy a year after we got married. We thought it’d be a good idea to get it while he was still young and in good health. My husband was 33 and I was 29. A nurse came to our house to take his blood samples and weight as part of the process. [We were] mostly preparing for the future to avoid unforeseen financial setbacks and he wanted to make sure I’d always be okay financially. Part of the push was also from my father-in-law who recommended we do it while we’re young too.”
— NADIA, SENIOR UX RESEARCHER FOR BANKRATE
Nadia’s story reflects a growing trend among younger adults: making proactive financial moves before major milestones like having children. Encouragement from family — combined with the desire to lock in low premiums while healthy — can also be a powerful motivator.
“I wouldn’t say there was much else that drove our decision to get life insurance before we had our daughter. We were both young and healthy at 28 and 29 years old, and while it would be tragic if one of us passed, one income would have been sustainable for the survivor. Our workplaces also provided a free basic life insurance package that worked for us at the time.
After we had our daughter, there was no question. We went for the highest payout option possible, so if one of us passed, the other could focus on her and not have to worry about paying off the house, affording groceries, etc. Especially with the way this economic environment has been going.”
— MARLESE LESSING, SMALL BUSINESS LOANS WRITER FOR BANKRATE
Lessing’s experience underscores how life events — like becoming a parent — play a pivotal role in life insurance decisions. But what’s shifted is the timing and the urgency. In a financial climate marked by inflation and uncertainty, young families are likely opting for maximum protection early on, knowing it’s one of the few ways to help safeguard their household’s future.
Bankrate asked Brett Anderson, CFP®, ChFC®, CLU®, a financial planner at St. Croix Advisors in Minnesota, what young people should consider if they are looking into buying a life insurance policy. Anderson says, “Factors to consider include: Do I want to provide for the loss of my income to my spouse or significant other, or children, and for how long? Provide funds for children’s education, pay off the mortgage or other debts, or cover final expenses? You may not have all these financial responsibilities today, but you may down the road. You can lock in your life insurance now to protect your insurability. It’s possible that later on in life, one can become uninsurable due to health reasons.”
Bottom line
Millennials and Gen Z aren’t just waiting around for life to hand them milestones — they’re showing signs that they are ready to protect what they’ve already built. Whether it’s the hustle of gig work, managing rising debt or just wanting to make sure their loved ones aren’t left holding the bag, these generations are showing up to the life insurance conversation with new priorities.
But the old school way of selling life insurance won’t cut it. If insurers want to earn their place in younger people’s financial lives, they’ll need to rethink the rulebook: less jargon, more clarity; less red tape, more relevance. This isn’t about convincing them they need life insurance — most already know that. It’s about proving the industry is ready to meet them halfway.
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