Consumers under 40 delay life insurance as marriage, parenthood come later: Capgemini-LIMRA report

Consumers under 40 often ignore traditional life insurance plans, citing a mismatch with their life stage, according to the World Life Insurance Report 2026, a joint study by the Capgemini Research Institute and LIMRA.

The report shows that, although 68% of adults under 40 consider life insurance essential for a healthy financial future, current products do not match their financial priorities, which hampers uptake.

The report finds that young consumers seek near-term gratification through easy-to-access benefits throughout their life, which are often not included in a traditional life insurance policy. While some carriers offer these benefits, one in four consumers still turn down life insurance due to confusing processes and complex jargon that make policies difficult to understand and use.

According to the report, life insurance industry is facing a critical challenge as its next generation of customers redefines their major life milestones.

The Capgemini-LIMRA study reveals consumers under the age of 40 today are delaying or skipping the traditional triggers for purchasing life insurance, around 63% have no immediate marriage plans and 84% of both single and married people have no immediate plans to have a child.

The report, which surveyed over 6,100 individuals aged 18-39 across 18 markets, highlights a notable paradox as the significant wealth transfer begins over the next 15-20 years. With millennials and Gen Z expecting an average inheritance of US$106,000 per person, life insurance remains a key destination for these funds.

In fact, forty per cent of under-40 adults regard life insurance and annuities as the third most important pillar for their inheritance investment plan, behind stocks and cash savings.

“As the next generation accumulates wealth and pursues a less traditional life path, their expectations around financial protection are evolving. The life insurance industry cannot rely solely on traditional death protection to sustain its future. Life insurers need to demonstrate value to include near-term gratification — delivering tangible benefits that customers can access during their lifetime,” said Samantha Chow, Global Leader for Life Insurance, Annuities and Benefits Sector at Capgemini. “Fortunately, life insurers can bridge this gap by deploying innovative products and articulating their value in ways that resonate with tomorrow’s policyholders.”

Life insurers are starting to recognise how the needs and expectations of the under-40 market differ from those of older customers. Global life insurance leaders identify factors such as aging populations and increasing longevity (64%), delayed life milestones (53%), and ongoing economic uncertainty (51%) as key drivers of their long-term strategies, stated the report.

However, perceptions about life insurance still pose a challenge for providers. When asked about obstacles to purchasing life insurance, younger consumers mention a mismatch with their current life stage (32%), high premium costs (28%), and no immediate benefits (25%). Instead, these younger adults want easy access to ‘living benefits’ that support their changing life experiences, looking for everything from wellness rewards for healthy behaviours to coverage for fertility treatments.

“Carriers need a different playbook when marketing life insurance to the younger generations,” said Bryan Hodgens, Senior Vice President and Head of LIMRA Research. “Our joint research shows that the price misconceptions, coupled with competing financial priorities, position life insurance at a disadvantage with younger adults. Carriers must not only demonstrate the accessibility and affordability of life insurance but also need to reimagine the product to address younger adults’ current financial priorities while adapting to meet their future financial goals as they age.”

Consumers also want life insurance that isn’t contingent on their current employer. Despite 44% of employees with a group policy seeking coverage that moves with them when they change jobs, only 19% of life insurers currently offer it. A complex conversion process limits portability and prevents many benefit providers from keeping long-term customers. Therefore, many consumers have no choice but to change policies when they switch jobs, even if they are happy with their previous coverage.

Delivering the living benefits and seamless experiences that younger consumers demand requires a richer value proposition, innovative channels, and technological transformation.

According to the report, 59% of under-40s want direct digital engagement, but only 31% of the surveyed insurers provide the necessary platforms to facilitate it. This gap is even more pronounced with advanced technologies, as 77% of consumers expect comprehensive, data-driven recommendations; yet, only 16% of insurers participating in the survey offer them at scale, primarily due to outdated legacy systems.