The majority of adults aged under 40 can see the point in life insurance but many resist taking it out because industry offerings fail to meet their financial priorities.
This is according to the World Life Insurance Report 2026, conducted jointly by the Capgemini Research Institute and LIMRA.
The report which surveyed 6,176 individuals aged 18 to 39 and 200 senior insurance executives across 18 markets showed that even though 68% of young adults see life insurance as essential for a healthy financial future, current offerings did not align with their financial priorities, hindering adoption.
Younger consumers were seeking near-term gratification through easy-to-access benefits throughout their life, which were often not included in a traditional life insurance policy.
While some providers offer these benefits, one in four consumers were still turning down life insurance due to confusing processes and complex jargon that make policies difficult to understand and use, they noted.
Skipping trigger events
The study revealed consumers under 40 were delaying or skipping the traditional triggers for purchasing life insurance – 63% had no immediate marriage plans and 84% of both single and married people had no immediate plans to have a child.
Perceptions about life insurance also remain a hurdle.
When asked about barriers to purchasing life insurance, younger consumers cited a misalignment with their current stage in life (32%), high premium costs (28%), and lack of immediate benefits (25%).
Instead, these younger adults wanted easy access to living benefits that supported their changing life journeys, seeking everything from wellness rewards for healthy behaviours to coverage for fertility treatments.
The report also highlighted that consumers wanted life insurance that was not contingent on their current employer.
Despite 44% of employees with a group policy seeking coverage that moves with them when they change jobs, only 19% of life insurers currently offer it.
Recognising differing needs
Encouragingly the report found life insurers were realising the needs and expectations for the under-40 market differ from older customers.
Global life insurance executives identified factors such as ageing populations and rising longevity (64%), delayed life milestones (53%), and continued economic uncertainty (51%) as key drivers of their long-term strategies.
Digital engagement was also an expectation of the under 40s.
According to the report, 59% of under-40s wanted direct digital engagement, but just 31% of insurers surveyed offer the platforms to enable it.
This shortfall was even more pronounced when it comes to advanced technologies, as 77% of consumers expected comprehensive, data-driven recommendations, but only 16% of insurers that participated in the survey provide them at scale, largely due to outdated legacy systems.
To close this divide and win the next generation, the report recommends life insurers focus on three core pillars of transformation:
- Innovate the product: launch flexible solutions with living benefits at the core, simplifying underwriting and gamifying engagement to deliver tangible value across all life stages.
- Empower the adviser: equip agents with AI tools and customer insights for personalised guidance and modernise compensation models to attract the next generation of agents.
- Forge strategic ecosystem partnerships: embed life insurance into everyday experiences by seamlessly partnering with financial institutions, wellness companies, and HR platforms to deliver timely, contextual value.
Evolving expectations
Samantha Chow, global leader for life insurance, annuities and benefits sector at Capgemini, said: “As the next generation accumulates wealth and pursues a less traditional life path, their expectations around financial protection are evolving.
“The life insurance industry cannot rely solely on traditional death protection to sustain its future. Life insurers need to demonstrate value to include near-term gratification – delivering tangible benefits that customers can access during their lifetime.
“Fortunately, life insurers can bridge this gap by deploying innovative products and articulating their value in ways that resonate with tomorrow’s policyholders.”
Bryan Hodgens, senior vice president and head of LIMRA Research, added: “Carriers need a different playbook when marketing life insurance to the younger generations.
“Our joint research shows that the price misconceptions, coupled with competing financial priorities, positions life insurance at a disadvantage with younger adults.
“Carriers must not only demonstrate the accessibility and affordability of life insurance but also need to reimagine the product to address younger adults’ current financial priorities while adapting to meet their future financial goals as they age.”
