Ask a 25-year-old whether life insurance is important, and there is a good chance they will say yes. Ask whether they actually own a policy, and the answer is much more likely to be no.
That gap says a lot about how younger adults think about Gen Z life insurance today. Many understand that life insurance can help protect family members, cover debts, or provide financial support if something unexpected happens. However, knowing life insurance matters is not the same as feeling ready to buy it.
The numbers show the same thing.
The Gen Z Life Insurance Coverage Gap, by the Numbers
A 2026 World Life Insurance Report from the Capgemini Research Institute and LIMRA surveyed more than 6,100 adults under 40 across 18 markets. It found that 68% see life insurance as essential to a healthy financial future.
That sounds promising, but ownership tells a different story.
Separate research from LIMRA and Life Happens shows that only about one-third of Gen Z adults own life insurance. Ownership rises with age, reaching well over half of Baby Boomers. Belief in life insurance remains fairly steady across generations, but actual ownership increases with age.
So the issue is not that Gen Z does not care. Many young adults say they plan to buy life insurance. Nearly 40% of Americans intend to purchase a policy within the next year. Among Gen Z, that share rises to 44%, second only to Millennials at about 50%.
In other words, this is not rejection. It is delayed. Many young adults know that life insurance is important, but they often put it off to focus on immediate expenses like rent, student loans, career changes, and daily living costs.
Why Gen Z Keeps Putting It Off?
Life Milestones Are Happening Later
For decades, people often bought life insurance after major life events: getting married, having children, or buying a home. Those moments made the need for coverage more obvious. Once someone else depended on your income, life insurance became less of a “maybe later” decision and more of a practical one.
Those milestones are happening later now.
The same Capgemini-LIMRA research found that 63% of adults under 40 have no immediate plans to marry, and 84% have no near-term plans to have children. That matters because many people still connect Gen Z life insurance with marriage, kids, or a mortgage. If those milestones are pushed further into the future, life insurance can remain in the “someday” category for years.
Complexity also plays a role. The report found that one-quarter of young consumers turn down life insurance because the products feel too complicated or the language is hard to understand. For someone already managing bills, work, debt, and savings goals, a confusing financial product is easy to avoid.
The Cost Myth
Cost is one of the biggest reasons young adults put off life insurance. However, in many cases, the bigger issue is not the actual price. It is what people assume the price will be.
LIMRA research has found that about seven in ten Americans overestimate the cost of a basic term life policy. Younger adults are especially likely to guess too high, sometimes estimating the cost at 10 times the actual price or more.
That misunderstanding changes the decision. If someone thinks life insurance costs $150 a month, it is easy to delay it while paying rent, managing loans, or trying to build savings. For many healthy young adults, the real cost is much lower.
What Gen Z Life Insurance Actually Costs at 25?
For a healthy, non-smoking 25-year-old, a 20-year term life insurance policy with $500,000 in coverage is often more affordable than most people expect. MoneyGeek’s 2026 rate analysis puts monthly premiums at around $30 for women and closer to $40 for men, depending on the insurer.
That is less than many people spend each month on streaming subscriptions, food delivery, or a few takeout meals. In return, the policy could provide a meaningful payout to a partner, parent, sibling, or anyone else who depends on your income or financial support.
The cost also tends to rise over time. Gen Z life insurance pricing is heavily influenced by age and health. Someone who applies at 25 will usually qualify for a lower rate than someone applying at 35 or 45. Waiting does not just delay the decision. It can make coverage more expensive later.
You Do Not Need a Mortgage or Kids to Need Life Insurance
A lot of people still think life insurance is something you buy after getting married, buying a house, or having children. Those are good reasons to consider coverage, but they are not the only ones.
Plenty of people in their 20s already have financial responsibilities, even if those responsibilities do not look traditional.
If a parent or partner co-signed a student loan or car loan, that debt may not simply disappear if you die. Depending on the loan, the co-signer could be left responsible for the balance. A Gen Z life insurance policy can be sized to help cover that debt, so the person who helped you financially is not left with the burden.
Many young adults also support families in less formal ways. They may contribute to household bills, send money to a parent, help with a sibling’s education, or share expenses with a partner. These arrangements may not always feel like “dependency,” but they still matter. If someone would struggle financially without your income or support, life insurance is worth considering.
Even if no one depends on you right now, buying life insurance for Gen Z while you are young and healthy can still be valuable. It can help lock in a lower rate before future responsibilities or health changes make coverage more expensive.
What is Changing in 2026: Living Benefits
Some hesitation around life insurance comes from how the product has been understood for years. To many young adults, life insurance feels like something that only pays out after death. That can make it feel distant, especially for someone in their 20s.
That view is starting to change.
The Capgemini-LIMRA report found that consumers under 40 want financial products that offer value throughout their lives, not only at the end. Insurers are still catching up to that expectation. According to the report, 59% of younger consumers want direct digital engagement with their insurer, while only about 31% of carriers surveyed offer platforms that support it.
That gap helps explain the growing interest in hybrid products and Gen Z life insurance policies with living benefits. Some policies include wellness-related features. Others may allow policyholders to access part of the death benefit while they are still alive if they are diagnosed with a serious illness.
For younger buyers, this can make life insurance feel more relevant. It is not always only about a payout far in the future. In some cases, it can also provide support during life.
Getting Covered is Easier Than Many People Think
The application process has also kept people from buying life insurance. Medical exams, long forms, slow underwriting, and weeks of waiting made the process feel intimidating.
That is not always the case anymore, especially for healthy applicants.
NerdWallet and Guardian Life both note that many insurers, including digital-first platforms, now offer no-exam term life insurance. In many cases, applicants answer health and lifestyle questions online, and some receive a decision much faster than they would through a traditional process.
That does not mean everyone qualifies instantly. Age, health history, coverage amount, and insurer guidelines still matter. Some applicants may still need a medical exam or additional review. However, overall, the process is often simpler than people expect.
For Gen Z, the hesitation makes sense. However, many of the old reasons for waiting are weaker than they used to be. Gen Z life insurance can cost less than expected, the application process can be easier, and the need for protection can show up long before marriage, children, or a mortgage.
Life insurance may not feel urgent at 25. However, if someone already depends on your income, if you share debt with another person, or if you plan to build a family later, waiting is not always harmless.
The gap between believing life insurance matters and actually buying it is real. Closing that gap starts with a simple shift in thinking: life insurance is not only a future milestone purchase. For many young adults, it is a practical financial decision that may be easier and cheaper to make now than later.
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