Life Insurance Awareness Month: Overcoming 3 Common Coverage Barrierstime for adults of all ages to consider life insurance. You may be surprised to learn that life insurance isn’t just for those over age 40 or married with children. In fact, many younger individuals recognize the advantages of securing life insurance as early as possible.
Key Takeaways
- Millennials and Gen Z are the generations most likely to say they need life insurance, and also the least likely to say they have enough.
- Healthy adults age 30 and under guess that a basic term policy costs 10 to 12 times more than it actually does, according to the 2025 LIMRA and Life Happens Insurance Barometer.
- Cost is the top reason young adults skip coverage: 48% of Millennials and 39% of Gen Z cite it, even though a basic term policy is often affordable.
- Life insurance rates rise with age and health risk, so buying young can lock in a lower rate for the full length of a term.
- Term life insurance is the most affordable option and fits most young families; permanent life insurance costs more because it builds cash value.
- About one-third of young adults say they aren’t sure how much coverage they need or what type to buy, which is where a broker review helps.
Life Insurance Perceptions: Surprising Data
In the 2025 Insurance Barometer from LIMRA and Life Happens, Millennials and Gen Z were the groups most likely to say they need life insurance or need more than they currently have. Interestingly, they were also the least likely to feel they have enough. The study found that 54 million Gen Z and Millennial adults recognize their need for coverage.
Interest in life insurance tends to coincide with general financial concerns, and among all generations, Millennials have reported the highest levels of financial concern. Gen Z’s concern has also risen as the oldest members approach 30 and start to take on more family responsibilities.
Overcoming Barriers to Coverage
Nearly half of the adult U.S. population recognizes the need for more life insurance coverage. What’s stopping these people from buying the protection they need? LIMRA found that cost was the primary reason: 48% of Millennials and 39% of Gen Z adults cited the perceived cost. That perception is possibly unfounded. When healthy adults age 30 and under were asked to guess the price of a basic term policy, their estimates ran 10 to 12 times higher than the actual cost, and roughly three in four adults overall overestimate the cost of basic term coverage.
In other words, people think they can’t afford life insurance, even though they probably can. In our experience, the most common surprise for young clients is the monthly cost. People expect a number closer to their car insurance and are relieved when a quote comes in well below that. Read more in our post on overcoming three common coverage barriers.
While the cost of a term life insurance policy varies based on a number of factors, including age, health, the benefit amount, and the length of the policy term, coverage is surprisingly affordable for most people. For instance, according to MoneyGeek a 30-year-old woman might pay $15.00 a month for a $250,000 policy with a 10-year term.
The Advantages of Buying Coverage Young
Because life insurance rates increase based on age and health risks, it’s smart to buy coverage as early as possible, and to lock in a 30-year term if it makes sense for you. For instance, if you purchase coverage when you’re 30 years old, you will be covered through age 60, at the low rate you locked in three decades prior.
There are also other reasons to buy coverage when you’re young.
Although a young, healthy person’s odds of death are low, they are not zero. Nobody knows what the future will hold, and unexpected events like car crashes and cancer diagnoses are always possible. It’s smart to be prepared. An unexpected death often creates a financial burden for surviving family members. However, an inexpensive life insurance policy can make life easier for your loved ones by covering final expenses, paying off your remaining debts, and providing for those who rely on your income. Life insurance can also be used to leave a gift for a beloved charity if you choose.
How Much Life Insurance Do You Actually Need?
About a third of young adults say they don’t know how much coverage to buy. A practical starting point is to add up what your family would need if your income disappeared: replacement of income for the years your dependents would rely on it, outstanding debts such as student loans or a mortgage, and final expenses. Then subtract existing resources such as savings or employer-provided coverage. A broker can pressure-test the number against your situation. If you’re not sure who else might need coverage, see our guide on eight types of people who need life insurance.
Finding Coverage That Meets Your Needs
There are multiple types of life insurance policies, some of which are more expensive than others. Here are two general categories:
| Policy Type | Duration | Benefit | Cost | Riders |
| Permanent / Whole Life | Stays in force until you die, if you pay the premium. | Pays a lump sum death benefit to named beneficiaries. Also builds cash value that you can use like a savings account, as you wish. | Because permanent policies build cash value, they cost more. | Many policies offer optional riders to enhance your coverage with “living” benefits. One popular example is the chronic illness rider, which allows you to collect part of the death benefit if you are diagnosed with a chronic illness. |
| Term | Stays in force for the duration of the selected policy term, often 10, 20 or 30 years, if you pay the premium. | Pays a lump sum death benefit to named beneficiaries. Does NOT build any cash value. | Term policies are the most affordable type of life insurance. | Term policies tend to be basic, with few optional riders. |
As the chart illustrates, a permanent life insurance policy that builds a cash value will cost significantly more than a term policy. You’ll also have to pay more if you want a larger benefit: a $1 million term policy will cost more than a $250,000 term policy.
If you need affordable coverage that will ensure your family is taken care of, a term life insurance policy with a modest death benefit is a great option. More comprehensive coverage or additional benefits are also available. You can also layer multiple types of policies to maximize your protection levels.
Don’t let the options overwhelm you. An insurance broker can help you assess your life insurance needs and explore your options to find a policy that works for you.
Find Out What Coverage Would Really Cost You
Since most young adults overestimate the price of a policy by a wide margin, the quickest way to know is to ask. Heffernan Insurance Brokers offers a complimentary review and assessment through our life insurance services, so you can compare term and permanent options and see an actual number before you decide.
