A new publication from U.S. nonprofit associations, LIMRA and Life Happens, the 2025 Insurance Barometer Study, has found that young adults generally think the cost of an insurance policy is significantly more than its actual price.
“When asked to guess what the premium of a $250,000, 20-year, level term policy would be for themselves, healthy adults in the 18 to 30 year-old range overestimated the median cost,” they write, saying the survey respondent’s guesses came in 10 to 12 times higher than the true cost of insurance. When asked about their reasons for not owning life insurance or more life insurance, 48 per cent of Millennials and 39 per cent of Gen Z adults mentioned the perceived cost.
An education opportunity also exists: the Gen Z and Millennial consumers surveyed said they did not understand the underwriting process or the different types of life insurance products available. “Less than a quarter of Gen Z adults and Millennials say they are knowledgeable about insurance underwriting,” the report’s researchers continue. “The lack of knowledge could be inhibiting healthy, young consumers from obtaining the coverage they need.”
Among those young adults who owned life insurance, 47 per cent said they were extremely or very knowledgeable about the product while 24 per cent said they lacked knowledge. Those who said they were not at all knowledgeable had an insurance gap, identified in this case as a recognized need for life insurance.
“While young adults recognize their need for insurance, the survey indicates they seem too intimidated by the overall process to purchase the necessary coverage,” the report states. One third of Gen Z and Millennial consumers surveyed were unsure about how much life insurance they need or what type to buy.
The report also notes that consumers, especially young adults, seek information about financial and insurance products using social media. This number is up to 80 per cent of those under 45 admitting as much, up from 29 per cent who said the same when the question was asked in 2019.
And while six in 10 said they would use an artificial intelligence (AI) tool to research a life policy, 42 per cent said they would prefer to buy from a professional in person; three in 10 would prefer to purchase directly from a company.
