Americans are increasingly taking a pass on owning life insurance, with only 51 percent of adults having life insurance policies in 2024, according to LIMRA. That’s down from 61 percent in 2011.
Generationally, it’s no surprise that the Baby Boomers lead the insurance pack, at 57 percent of policies, followed by Gen X (55 percent) and the Millennials (at 50 percent). Industry data show that older consumers are more likely to own life insurance as a means of passing down wealth to their children.
Even so, new data show that adults under age 40 say life insurance doesn’t align with their lifetime goals, and are subsequently shunning life insurance policies because they don’t need them.
That data comes from the Capgemini Institute in association with LIMRA. In a new combined report titled The World Life Insurance Report 2026, less than 25 percent of Americans below age 40 own life insurance policies, and for multiple reasons.
- For starters, 63 percent of under-40s say they have no immediate marriage plans, and 84 percent of both single and married people have no immediate plans to have a child, which takes away the main reasons to have life insurance in the first place.
- That same cohort also points a finger at the paperwork-heavy insurance industry, with 25 percent of under-40 adults going without life insurance because of “confusing processes” and “complex jargon” attached to life insurance contracts.
- Under-age-40 consumers also say life insurance shouldn’t be contingent on their current employer. According to the study, despite 44 percent of employees with a group policy asking for life insurance coverage that remains with them when they change jobs, only 19 percent of life insurers currently offer it. “A complex conversion process limits portability and prevents many benefit providers from keeping long-term customers,” the study noted. “Therefore, many consumers have no choice but to change policies when they switch jobs, even if they are happy with their previous coverage.”
“Carriers need a different playbook when marketing life insurance to the younger generations,” said Bryan Hodgens, senior vice president and head of LIMRA Research, in a statement. “Our joint research shows that the price misconceptions, coupled with competing financial priorities, position life insurance at a disadvantage with younger adults.”
Bypassing Life Insurance Comes With Substantial Risks, Even For Younger Adults
While no rule says anyone has to buy a life insurance policy, household finance experts say even younger people are taking a risk by holding off on a policy.
“When a child is now a new and your most important responsibility, the life insurance light bulb goes off,” Matt Minns, owner at LifeStein.com, a digital insurance comparison platform, told NTD. “People are having children at a later age in life, and in my opinion, the decline in the American family is a factor in not having life insurance.
That said, Minns advises younger Americans not to wait until they have a child to buy life insurance.
“During the Great Depression, almost every bank crashed, and many property and casualty insurance companies went bankrupt, people could not find work,” he noted. “But only one major life insurance company failed. During tough times, people need financial security for their families. Times are not easy now, and people need to buy a policy and help their family.”
Even if young parents roll the dice and wait to buy a life insurance policy, the risks aren’t worth the short-term financial savings reward.
“Here’s where it gets real,” Eugene Edwards, founder at London-based Eugene Financial Services, told NTD. “Imagine a 32-year-old with a toddler and a mortgage. If something happens, the surviving spouse is suddenly juggling daycare and house payments on one income.”
Even single individuals aren’t exempt, as student loans, co-signed debt, or credit card balances don’t simply disappear. “It’s less about doom and gloom and more about not leaving behind a financial scavenger hunt for your loved ones,” Edwards said.
Here’s How Younger Consumers Should Approach the Life Insurance Decision
For younger Americans looking to buy a good life insurance policy, the best advice is to keep it simple.
“Term life insurance is usually the smartest entry point,” Edwards said. “It’s affordable and covers you during your highest-responsibility years.”
With term insurance, a healthy 28-year-old can often get $500,000 of coverage for under $25 a month. “That’s less than the average Uber Eats habit, and it buys peace of mind that your family is covered,” Edwards noted. “I tell clients: it’s one of the few bills you’ll hope you never use,” but it’s the only one that guarantees your family can keep the lights on if you’re not here.”
The views and opinions expressed are those of the interviewees. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. NTD does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. NTD holds no liability for the accuracy or timeliness of the information provided.