Younger consumers skipping life insurance due to these triggers, shows report

A growing number of adults under 40 are opting out of life insurance, even though most recognize its importance for long-term financial security. According to the World Life Insurance Report 2026 by the Capgemini Research Institute and LIMRA, 68% of adults under 40 believe life insurance is essential; yet, many are not purchasing policies because traditional offerings don’t align with their current financial priorities or lifestyles.

The study highlights a major shift: traditional life triggers, such as marriage and parenthood, long seen as the primary motivators for buying life insurance, are being delayed or skipped altogether. Among respondents, 63% reported no immediate marriage plans, and 84% said they were not planning to have children in the near term. This shift is forcing the life insurance industry to rethink how it engages the next generation of policyholders.

Wealth planning

Interestingly, even as millennials and Gen Z delay these traditional milestones, they remain poised to inherit significant wealth. The report estimates an average inheritance of USD 106,000 per person over the next 15–20 years. Despite their hesitancy now, 40% of under-40 adults rank life insurance and annuities as the third most important use of this inheritance, just behind stocks and cash savings.

Samantha Chow, Global Leader for Life Insurance, Annuities and Benefits Sector at Capgemini, noted: “The industry cannot rely solely on traditional death protection to sustain its future. Insurers must demonstrate relevance by offering living benefits—products that provide tangible value throughout a customer’s lifetime.”

Why younger adults are saying no

Confusing processes, high costs, and lack of immediate benefits remain major barriers. Nearly one in three under-40s feel life insurance does not fit their current life stage, while 28% believe premiums are too expensive. Another 25% are discouraged by the absence of benefits they can access before death. Instead, younger consumers are looking for wellness-linked rewards, fertility coverage, and flexible policies that can adapt as their lives evolve.

Industry leaders acknowledge this gap. Bryan Hodgens, Senior Vice President at LIMRA Research, said, “Carriers must not only demonstrate affordability but also reimagine products to match younger adults’ current financial priorities.”

Portability and digital-first expectations

The report also underlines a growing demand for portable policies. While 44% of employees with group coverage want insurance that moves with them when they switch jobs, only 19% of carriers offer such flexibility. Additionally, technology expectations are high: 59% of younger consumers want direct digital engagement, and 77% expect data-driven recommendations. Yet only 31% of insurers provide digital platforms, and just 16% deliver AI-powered advice at scale.

Nitin Mehta, Chief Distribution Officer – Partnership Distribution and Head of Marketing at Bharti AXA Life Insurance, said: "In the wake of delayed life milestones among India’s under-40 demographic, the life insurance sector faces a pivotal moment. According to a report, insurers globally and in India have seen young adults opting out of traditional life cover as marriage and family decisions get postponed, diluting historic purchase triggers. 32% of under-40s cite misalignment with their current life as a barrier and 28% feel premiums are simply too expensive—despite younger adults consistently overestimating average policy costs." 

The report concluded that to stay relevant, life insurers must rethink traditional models and align offerings with the evolving priorities of younger adults. Products that provide flexible, digital-first, and tangible benefits throughout life are key to bridging the adoption gap. Without innovation and personalized engagement, the industry risks missing out on an entire generation of future policyholders.