Gen Z is finally buying life insurance, but not for the reasons you might expect
Gen Z is finally buying life insurance, but not for the reasons you might expect
Why is Gen Z embracing life insurance now — and how does their buy-in impact the life insurance industry? Everly Life explains.
Life insurance carriers are presented with a challenge and an opportunity to keep Gen Z engaged. While the narrative was once “life insurance as a family protection tool”, this cohort is leaning into life insurance as a tool that provides flexibility, living benefits, and financial resilience.
Gen Z is delaying milestones, like marriage, parenthood, and home ownership — some of the traditional drivers of life insurance demand. When they do consider life insurance coverage, misconceptions about premium costs often discourage them from buying enough — or any — coverage.
Despite these barriers, 42% of Gen Z adults aged 18-27 say they have life insurance, and 49% admit they need to obtain or increase coverage.
This growth signals a generational shift: a group that was once uninformed about legacy financial products is becoming life insurance consumers. But many aren’t motivated to buy insurance to protect their loved ones. Instead, they're attracted to life insurance policies that they can benefit from now. As such, “living benefits”, or coverage that policyholders can access while they’re alive — like cash value and insurance riders — can easily resonate with Gen Z.
The reasoning behind this shift reveals how younger consumers are redefining life insurance — and they might surprise you.
Why Life Insurance Is Gaining Traction with Gen Z
Financial security concerns are shaping their decisions.
Gen Z entered adulthood during COVID-19, inflation spikes, layoffs, and rising healthcare costs. These experiences have shaped their view of finances. In fact, a third of Gen Z are stressed about their finances, and of those, 52% say economic instability is a root cause. As a result, they make financial decisions with caution. Consequently, 70% of Gen Z agree that they are more careful with their finances than in the past.
In comparison to other generations, Gen Z is more focused on meeting their day-to-day financial obligations rather than future financial security. Because they are concerned with managing immediate financial obligations, Gen Z can view life insurance as a means of protection against uncertainty, not just a family-planning tool.
Living benefit coverage matters more than future protection.
Living benefits — such as cash value — can provide access to funds during illness, income disruption, or emergencies. Since Gen Z is concerned about financial resilience, they may be increasingly attracted to policies that can provide financial support while they are living.
Gen Z is spending more time with financial products that can help them manage debt and lifestyle choices. Because traditional life insurance doesn’t support these goals, it’s not always an attractive option for this younger audience. On the other hand, life insurance policies with living benefits may satisfy this demand through tangible financial support, like cash value options that allow policyholders to build wealth and access their funds when they need them.
Digital-first innovations make life insurance more accessible.
As digital natives, Gen Z expects financial services to be accessible online. Although slow to make the shift, some life insurance carriers offer digital-first solutions with simplified applications, faster approvals, and transparent pricing. By meeting younger generations where they are, life insurance is becoming more accessible, relevant, and appealing to this younger audience.
Gen Z is choosing an education-first approach.
Gen Z is considered the most educated, diverse generation in history. Many turn to online resources, social media, and financial influencers to learn about policy options, benefits, and costs. This contrasts with earlier generations, who typically rely on agents or family advice. In fact, 96% of Gen Z conduct online research to help them make decisions before purchasing a policy. Gen Z’s educational approach hints at their desire to be better equipped to buy life insurance than other generations may have been in the past.
Gen Z Is Redefining Life Insurance
Gen Z’s emphasis on financial wellness often leads them to prioritize experiences, health, and personal fulfillment. Life insurance can support Gen Z’s holistic financial approach. For example, cash value can complement their long-term goals, like retirement plans, and can also give them options to support short-term goals, like a car down payment.
Forty-three percent of Gen Z are concerned about job security and maintaining a steady income. So, it’s unsurprising that they view life insurance as a safety net from economic uncertainty and a means to provide financial stability.
Life insurance may finally have Gen Z’s buy-in, but maintaining that momentum requires the industry to rethink its traditional approach to coverage.
This story was produced by Everly Life and reviewed and distributed by Stacker.
