Fresh Perspective on Life Insurance: Gen Z and Millennials Take the Driver's Seat
Life insurance transitions in sync with Gen Z and millennial demographic shifts
Gone are the days when life insurance seemed like an afterthought for settling down with a house, spouse, and kids. Today's youth, Gen Z and millennials, are rethinking that timeline and approaching life insurance with a new level of foresight and pragmatism.
navigation through financial turbulence. From weathering economic crises like the Great Recession to grappling with persisting inflation, these young generations have developed a more cautious yet proactive financial mindset.
Inflation, Debt, and the Importance of a Backup Plan
The financial landscape has become increasingly difficult for the younger generation. Gen Z borrowers now carry student loan debt growing at an alarming 6.72% annually - the most among all generations. Meanwhile, living costs have significantly increased. Comparing to millennials at the same age, Gen Z spends 31% more on housing, nearly double on car insurance, and 46% more on health coverage. In this context, financial safety nets like life insurance start to feel like more of a necessity than an option.
As of early 2025, shelter has become the most significant pressure point in terms of inflation, followed by food costs and then car insurance and medical care. When everyday costs are constantly on the rise, ensuring financial stability for loved ones takes on a fresh sense of urgency.
The Pandemic's Lasting Impact: A Shift in Perspective on Protection
COVID-19 brought an abrupt change to daily life, forcing many young people to reevaluate their perspective on the future. The idea that things can change unexpectedly overnight is no longer theoretical - it's a lived experience. For Gen Z in particular, this shift has led to increased financial vulnerability. One in seven Gen Z now finds themselves maxed out on credit cards, and delinquencies among young adults are on the rise.
In this context, life insurance is evolving from a tool strictly for preparing for the worst to a means of safeguarding the progress that young adults are working hard to achieve. Whether or not they have kids or a mortgage, a growing number are seeking ways to create peace of mind for their partners and families.
Employer Benefits: Not Enough for the Job-Hopping Generation
Job-hopping is more common among Gen Z and millennials compared to older generations, resulting in less access to long-term employer benefits like group life insurance. With gig work playing a significant role in this shift, a majority of gig workers rely on this supplementary income, and for many, it's their primary source. Since most gig work doesn't include benefits like life insurance, younger adults are realizing the need to explore individual policies on their own terms.
Life Insurance Companies: Adapting to a New Demographic
Traditionally, young generations have been slow to adopt life insurance due to its inconvenience and opacity. However, this is rapidly changing. Online-first providers such as Corebridge, Ethos, Ladder, and Lemonade offer fast quotes and expedited application processes, catering to the digital-native buying habits of younger consumers.
According to a recent Corebridge study, 46% of millennials and 40% of Gen Z say they'd be more likely to buy a policy if it could be approved in 24 hours, demonstrating the importance of convenience in this demographic's decision-making process.
Misconceptions and Barriers: Persisting Challenges for Younger Consumers
Affordability remains a significant concern for young adults, with many underestimating the actual cost of life insurance. Despite this, costs are actually more affordable for young and healthy individuals. As education around real pricing spreads, younger consumers may begin to realize the potential savings of locking in premiums early.
Social Media: Shaping the Way Younger Generations Learn about Life Insurance
Financial influencers on social media are making once-taboo money topics more approachable, including life insurance. Over 81% of Gen Z and 75% of millennials seek financial advice on social media platforms like TikTok and Instagram. Influencers may promote life insurance as an investment tool or highlight cash value components, but it's essential for younger consumers to seek guidance from credible sources and licensed financial professionals to avoid potentially misleading advice.
Real Voices: Young Adults Making Proactive Financial Decisions
Stories from young adults like Nadia, a senior UX researcher for Bankrate, and Marlese Lessing, a small business loans writer for Bankrate, highlight a growing trend among younger generations: making proactive financial decisions before major milestones like having children or getting married. Encouragement and advice from family, combined with the desire to lock in low premiums while healthy, motivate these decisions.
Final Thoughts
Millennials and Gen Z are shifting their focus from waiting for life to hand them milestones to actively protecting what they've already built. Whether it's the hustle of gig work, high debt levels, or a desire to ensure their loved ones are financially secure, these generations are making their voices heard in the life insurance industry.
However, the traditional approach of selling life insurance won't suffice. To earn a place in younger people's financial lives, insurers must rethink their strategies, employing less jargon, providing more transparency, and offering products that resonate with the modern consumer's financial priorities. It's not about convincing them they need life insurance; it's about proving they understand young people's unique financial challenges and are prepared to meet them head-on.
- Millennials, ready to take charge of their personal-finance, are reconsidering life insurance as a necessary component, given the increasing unpredictability in the financial landscape.
- With a growing awareness of the importance of financial safety nets like life insurance, many millennials and Gen Z are seeking insurance policies that can be approved quickly, such as those offered by online-first providers like Corebridge, Ethos, Ladder, and Lemonade.
- Embracing a more proactive financial mindset, millennials and Gen Z are making decisions to secure life insurance early, aiming to lock in premiums while they are young and healthy, demonstrating a clear shift from waiting for life to present them with milestones.
