Young adults forego life insurance, disregarding conventional life events like marriage and parenthood as they occur later in life.
The life insurance industry is undergoing a significant transformation as it prepares for a generational shift, with millennials and Gen Z expected to inherit substantial wealth over the next 15-20 years. According to the World Life Insurance Report 2026, conducted by Capgemini Research Institute and LIMRA, 68% of adults under the age of 40 view life insurance as essential for a secure financial future.
The Capgemini-LIMRA study, which polled over 6,100 individuals aged 18-39 across 18 markets, reveals some key challenges and opportunities for the industry. Young consumers are not adopting life insurance due to offerings that do not align with their financial priorities, and because of confusing processes and complex jargon.
However, life insurers are beginning to recognize the differences in needs and expectations for the under-40 market. Factors such as aging populations, rising longevity, delayed life milestones, and continued economic uncertainty are driving their long-term strategies.
The report recommends life insurers focus on three core pillars of transformation: innovate the product, empower the advisor, and forge strategic ecosystem partnerships. This includes launching flexible solutions with living benefits at the core, equipping agents with AI tools and customer insights, and partnering with financial institutions, wellness companies, and HR platforms.
One of the most pressing needs highlighted in the report is the modernization of compensation models to attract the next generation of agents. The report suggests this is part of empowering the advisor, who plays a crucial role in bridging the gap between traditional life insurance offerings and the needs and expectations of the under-40 market.
Young consumers are demanding easy access to 'living benefits' that support their changing life journeys. They seek everything from wellness rewards for healthy behaviors to coverage for fertility treatments. However, only 59% of under-40s want direct digital engagement, and just 31% of insurers surveyed offer the platforms to enable it.
Another challenge identified in the report is the lack of portable life insurance coverage. Only 19% of life insurers currently offer coverage that moves with employees when they change jobs, despite 44% of employees with a group policy seeking this feature.
In Germany, companies like Allianz offer lifelong life insurance with guaranteed lifelong pension payments and innovative capital investment options. However, specific offerings including lifetime benefits such as health reward systems or fertility treatments with easy digital access and portability during employer changes are not explicitly detailed in the available information.
Samantha Chow, Global Leader for Life Insurance, Annuities and Benefits Sector at Capgemini, states that the life insurance industry needs to demonstrate value by delivering tangible benefits that customers can access during their lifetime. She emphasizes the importance of providing comprehensive, data-driven recommendations, but only 16% of insurers that participated in the survey provide them at scale, largely due to outdated legacy systems.
In conclusion, the life insurance industry is being urged to deploy innovative products and articulate their value in ways that resonate with tomorrow's policyholders. By addressing the needs and expectations of the under-40 market, life insurers can tap into a significant source of potential growth and secure their position in the future of the industry.
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