Younger consumers are delaying traditional life milestones such as marriage and parenthood, contributing to a decline in life insurance ownership. Despite strong interest, actual purchases remain low. RGA research identifies four key product design considerations – relevance, simplicity, affordability, and flexibility – that can help insurers better connect with this demographic and reverse the downward trend.
Today’s 25-year-olds are far less likely to have life insurance than the 25-year-olds from the late 20th century. In 1989, for example, 65.1% of adults aged 20 to 39 owned some form of life insurance;1 by 2025, that total dropped to as low as 36% of Gen Z members.2
Though part of a general trend toward less life insurance ownership today (Figure 1), the reasons behind the decline among younger consumers are distinct, according to LIMRA and Capgemini ’s recent World Life Insurance Report 2026. Among them: Historical triggers such as marriage and parenthood aren’t happening as soon for today’s under-40 consumer – if they happen at all.3
This is just the latest data point that spotlights the challenge of selling insurance to the next generation.
For insurers seeking to attract and turn young customers into long-term policyholders, it is essential to develop tailored solutions that address their needs and perceived challenges. RGA’s research and experience reveal four key design considerations – relevance, simplicity, affordability, and flexibility. By incorporating these four factors into product development, insurers are starting to find success in attracting younger generations.
Delays in life milestones that historically prompted insurance purchases present a challenge for the industry. The average age at which a man and a woman marry today has increased approximately eight years since 1960,4 from 22.8 to 30.5 for men and 20.3 to 28.1 for women.
The LIMRA survey also revealed that 63% of consumers under the age of 40 have no immediate marriage plans, and 84% of both single and married under-40 adults have no immediate plans of having a child. This could be a contributing factor behind data showing Gen Z life insurance ownership is more than 20 percentage points lower than it is for Baby Boomers, and 14 percentage points lower than their own next-closest generation, Millennials (Figure 3).
This decline is not due to lack of intent. More than a third (39%) of consumers said in a 2023 US survey they intend to purchase life insurance in the coming year, with higher numbers for Gen Z (44%).5 Yet those intentions are not turning into actual purchases in sufficient numbers to halt or reverse declining sales.
The reasons younger consumers give for failing to purchase the coverage they know they need suggest opportunities for insurers to develop new solutions addressing those challenges, which include:
Insurers have an opportunity to design new life insurance propositions that are tailored to the needs of younger customers and that address the concerns they have identified. In doing so, the following design principles should be considered:
Young consumers are not a monolithic group. They range in stage of life from those just graduating high school through those who could be considered mid-career professionals.
Insurers can design and offer more relevant insurance products that align with key milestones and associated protection needs across this timeline, including life insurance products that offer value-added services relevant to younger consumers. Distribution approaches may also need to be adapted to different life stages, to help mitigate the concerns mentioned by younger customers about lack of access. This may involve considering alternative distribution approaches through partnerships with companies that already have a relationship with younger customers, rather than relying exclusively on traditional distribution models.
For example, home prices in India have increased 1,500% in the past three decades, according to one estimate.6 That has led more people to delay home purchases and rent instead. One digital real estate marketplace in India partnered with an embedded insurance startup to offer a rent protection plan that can be purchased with a click of a button when consumers submit their online rental payments. Premiums are embedded into the monthly rent payment workflow. Benefits include critical illness coverage from 15 conditions, a personal accident payment, and medical expenses in case of accidental hospitalization.
Increased relevance can lead to growth in the younger-consumer market. Once this younger generation is familiar with a relevant, affordable form of coverage, they can grow into other products as new life events occur and protection needs emerge – from home purchases to marriage to children.
Young consumers have indicated their uncertainty about how much coverage they need and which product to buy (Figure 4). This is likely in part due to the perceived complexity of existing insurance products, and of the language used to describe policy benefits and conditions. Insurers have an opportunity to design simple and easy-to-understand products that young consumers may be more comfortable to purchase, particularly in cases where they have limited access to advisors.
There is also an opportunity to leverage behavioral science techniques to increase comprehension. RGA's research shows that making key policy details more salient, such as by using FAQs or visuals, and improving the relevance of the information presented, for example by leveraging tools and calculators, as well as using video content, can significantly improve comprehension and engagement in digital life insurance customer journeys.7 These strategies should be particularly relevant for younger demographics accustomed to consuming visual content on social media platforms.
Furthermore, real-world case studies show that improved comprehension through behavioral science techniques can lead to a 48% increase in policy renewal rates and a 32% reduction in policy cancellation rates.8
Insurers also need to continue streamlining the life insurance purchase journey they offer to match younger consumers’ expectations based on the experiences they’re accustomed to from the apps they use daily. As an example, a digital life insurance distributor partnered with RGA and insurers in Canada to offer easy-to-purchase term life and critical illness insurance products, which have achieved success in the market, particularly with younger customers. They offer a streamlined digital customer journey, powered by RGA’s Aura Next e-underwriting platform, which allows users to complete a jargon-free fully underwritten application in as little as 20 minutes and receive an instant decision if eligible.
The insurance industry is battling a perception problem. One of the most frequently cited reasons for not having life insurance is that it is too expensive. But when asked for a cost estimate, younger consumers are far more likely to give a price far above the median than older consumers.
Innovations attached to low-cost products offer a direct way to change the narrative.
For example, an RGA-supported effort with a bancassurance product uses banking data to assess the risk of applicants and offer discounts to those who prove to be better risks. This tends to favor younger consumers, who generally are also healthier. Discounts range up to approximately 20% for the lowest risk segments.
Insurers can also address affordability concerns by offering benefits that young consumers appreciate and are able to use today, enhancing the overall value proposition of life insurance. For example, a life product sold through one of the largest retailers in Spain, incorporates a wellness rewards program that incentivizes physical activity. The product includes a mobile app that tracks daily steps and syncs with popular activity trackers. Clients can earn maximum rewards by averaging 10,000 or more steps per day. The program rewards users for maintaining an active lifestyle by converting their daily steps into monetary rewards, which can be accumulated and redeemed as gift cards.
The offering is tied to a popular shopping destination, and is the first insurance product in Spain rewarding customers for wellness activity. It attracts younger people by offering a relevant, simple, and affordable living benefit that encourages healthier living through flexible rewards.
Some items insurers must consider in balancing costs and customer cover include:
This leads directly to the final consideration.
People tend to procrastinate until they see a solution that matches their unique needs. Young people need to see insurance products relevant to them. Each customer has specific needs that must be balanced in coverage type and levels, premium structures, and underwriting.
For example, offering low and affordable covers initially that can flex as life events occur – such as home purchases, marriages, parenthood – or have the option to renew or convert into further insurance covers can be seen by younger consumers as relevant to their lives right now and, thus, individually tailored.
Similarly, while full medical underwriting traditionally leads to the lowest premium for healthy applicants, it can be too complex, and a barrier to entry, for younger consumers used to quick purchases. Offering flexible options that accommodate different trade-offs between price and customer experience can help address the wide range of needs expressed by younger consumers, from the most cost-sensitive, to those prioritizing the smoothest customer journey.
The insurance industry is seeing a change in life triggers, not an evaporation. Marriage and children might be happening later, but other milestones exist for insurers to offer relevant, simple, affordable, and flexible protection products.
Younger consumers may be harder to convert than in past generations, but product innovations can create a rewarding win-win proposition for both the young policy holder and the insurer.
Contact RGA today to discuss product development opportunities that help your business capture younger customers.
