Life Insurance Struggles to Attract Under-40 Buyers, Report Says

The life insurance industry faces a critical challenge as consumers under 40 increasingly decline traditional policies, driven by delayed life milestones and a preference for immediate, tangible benefits over death protection, according to the World Life Insurance Report 2026 by the Capgemini Research Institute and LIMRA.

The report, which surveyed more than 6,100 adults aged 18 to 39 across 18 markets, highlights a disconnect between traditional life insurance offerings and the evolving financial priorities of younger consumers. While 68% of adults under 40 consider life insurance essential for a healthy financial future, adoption is hindered by high costs, limited immediate benefits, and complex processes.

Redefining Life Milestones and Policy Value

Younger consumers are delaying or skipping life milestones that typically trigger life insurance purchases. The study found that 63% have no immediate plans to marry, and 84% of single or married respondents do not plan to have children soon.

Barriers to purchasing life insurance include misalignment with current life stages (32%), high premiums (28%), and lack of immediate benefits (25%). This generation favors “living benefits,” such as emergency financial support, wellness rewards, or coverage for fertility treatments.

Samantha Chow, Global Head of Life, Annuity, and Benefits, Capgemini, emphasized that the industry “cannot rely solely on death protection to sustain its future.” She urged insurers to offer tangible, short-term benefits that customers can access during their lifetimes.

Portability and Technology Gaps

Despite these challenges, younger adults anticipate significant wealth transfers and view life insurance as a key component of their financial planning. Forty percent of adults under 40 rank life insurance and annuities as the third most important pillar for wealth building, after stocks and cash savings.

The report also identifies gaps in portability and digital experience:

• Portability: 44% of employees with group policies want coverage that follows them when changing jobs, but only 19% of insurers provide it. Complex conversion processes limit portability and risk long-term retention.

• Technology: 59% of consumers under 40 want direct digital interaction, yet only 31% of insurers offer platforms to enable this. The gap is wider for advanced capabilities: 77% of consumers expect data-driven recommendations, but only 16% of insurers deliver them at scale, often due to outdated legacy systems.

To close the adoption gap, the report recommends life insurers focus on three transformation pillars:

1. Product Innovation: Offer flexible solutions with living benefits at the core, simplify underwriting, and use gamification to deliver tangible value at every life stage.

2. Advisor Empowerment: Equip agents with AI-driven insights for personalized guidance and modernize compensation models to attract the next generation of advisors.

3. Strategic Ecosystem Alliances: Integrate life insurance into everyday experiences through partnerships with financial institutions, wellness companies, and HR platforms, delivering timely and contextual value.