Life Insurance Ownership Has Fallen for 3 Decades. Young Adults Are at the Center of the Drop.

When LIMRA and Life Happens researchers asked healthy adults between 18 and 30 to estimate what a basic life insurance policy would cost them, the median answer was roughly $900 a year. Then researchers showed participants the true price: about $192 a year for a $250,000, 20-year term policy for that age group. Some participants still didn't believe the number. "Even when young adults were presented with a true median cost of an insurance policy, some participants still doubted us," said Bryan Hodgens, senior vice president and head of LIMRA Research. “This remains one of the biggest challenges for our industry to overcome.”

The cost gap isn't the only reason young adults go uninsured. Life insurance ownership in the U.S. has fallen for more than three decades, from 76.7% of households in 1989 to 56% in 2022, a drop that surprised Federal Reserve Bank of Chicago researchers who first documented it. Rising incomes and higher education levels over that period would have predicted modest ownership gains. Instead, ownership fell steadily. Among young adults, delayed life milestones, cost misperception and limited product knowledge each reinforce the others.

LIMRA's 2025 Insurance Barometer Study puts total life insurance ownership among U.S. adults ages 18 to 75 at 51%. Gen Z and millennial adults own at rates below that average. The distinguishing factor isn't lower ownership alone. The gap is the scale of unmet need: 54 million Gen Z and millennial adults say they need life insurance or more of it than they currently carry.

U.S. household life insurance ownership has declined for three consecutive decades. ACLI's 2025 Life Insurers Fact Book, drawing on Federal Reserve Survey of Consumer Finances data, documents the slide: 69.2% of households owned some form of life insurance in 1998, 62.6% in 2010, 60.1% in 2013 and 56% in 2022. The Chicago Fed put the 1989 baseline at 76.7%, a 16.5-point drop to 60.2% by 2013. The ACLI household series, a separate Survey of Consumer Finances tabulation, extends that decline to 56% by 2022.

The Chicago Fed researchers said the scale of the decline was surprising. Rising incomes and more education over that period would've predicted modest ownership gains, not a sustained fall. Evidence points away from broad economic hardship and toward changes in consumer behavior, specifically delayed milestones and confusion about the product.

Term life insurance household ownership fell 7.9 percentage points between 1989 and 2013, from 58.1% to 50.2%, the Chicago Fed found. Cash-value life insurance fell further, dropping 18.7 percentage points from 37.4% to 18.7%. By 2022, ACLI data show 45.6% of households held a term policy and 16.9% held a cash-value policy. LIMRA's 2025 Insurance Barometer, which surveys adults ages 18 to 75 on individual ownership rather than households, puts current ownership at 51%. The methodology and population differ, but the direction is the same. MoneyGeek's life insurance statistics page tracks additional ownership, coverage and cost data for journalists and researchers.

LIMRA's 2025 Insurance Barometer puts total life insurance ownership among U.S. adults ages 18 to 75 at 51%. Gen Z and millennial adults own at rates below that 51% average, per the LIMRA 2025 Barometer conference presentation. Gen X and older generations own at higher rates. That gap has held even as millennials have moved into their 30s and 40s.

Among lower-ownership groups, Gen Z and millennial adults have the largest unmet need gap. LIMRA's 2025 research found that 54 million Gen Z and millennial adults say they need life insurance or more of it than they currently carry. Bryan Hodgens, LIMRA's senior vice president for research, put it plainly in 2025: "54 million Gen Z and millennial adults recognize their need for life insurance." Recognition has not translated into purchase.

LIMRA's need gap measure, which tracks adults who say they need or need more coverage, stood at 40% of all U.S. adults in 2025, representing roughly 100 million people. About 74 million said they need life insurance, and 25 million said they need more than they have, per LIMRA's 2025 Barometer conference presentation.

Marriage, children and mortgages have long driven life insurance purchases. For earlier generations, those triggers arrived in the mid-to-late 20s, often before 30. For Gen Z and millennials, they have shifted later, or stalled entirely.

U.S. Census Bureau data show the median age at first marriage rose from 23 for women and 26 for men in 1990 to 28.6 for women and 30.2 for men in 2024. Homeownership rates among adults under 35 remain below historical norms. Capgemini's 2026 World Life Insurance Report described the shift plainly: traditional purchase triggers "are not happening as soon for today's under-40 consumer, if they happen at all."

LIMRA's 2025 data confirm the milestone effect. Parents with minor children were more likely to own life insurance than the general population, 59% versus 52%, and parenthood remained one of the strongest purchase triggers in LIMRA's annual tracking. But even among insured parents, 47% said they didn't carry adequate coverage, per the same study. That delayed-milestone pattern now stretches from college graduation into the mid-30s, a window in which many young adults carry real financial exposure with no clear trigger to act.

About 55% of working adults in the U.S. have life insurance through their employer, per LIMRA's 2025 Insurance Barometer. A common assumption holds that eroding employer benefits partly explains the ownership decline. The data don't support it.

ACLI's 2025 Fact Book, drawing on Bureau of Labor Statistics data, shows that access to employer-sponsored life insurance among private industry workers held at 55% to 59% from 2010 to 2024 (a narrower population cut than the LIMRA figure above): 59% in 2010, 55% in 2016 and 58% in 2024. Employers haven't cut the benefit at scale.

Two structural factors are more plausible explanations. Workforce composition is one: workers in part-time, gig or contract roles may fall outside the employer benefit system, leaving employer-sponsored coverage out of reach for some young adults. Job mobility is another: group life insurance is tied to employment and may end or require conversion after a job change, and many workers don't replace it individually. Standard group plans also pay one to two times annual salary, well below the 10 to 12 times income most financial planners recommend for families with dependents.

Perceived cost is the barrier young adults cite most. LIMRA's 2025 Barometer found that 48% of millennials and 39% of Gen Z adults cited it as a main reason they hadn't bought coverage.

LIMRA's 2026 Insurance Barometer presentation quantified the gap. Adults under 31 estimated an annual basic policy premium at roughly $900. The true annual cost for that age group was roughly $192 for a $250,000, 20-year level term life policy, per the same 2026 presentation. The overestimate runs 10 to 12 times the actual price.

Bryan Hodgens, senior vice president and head of LIMRA Research, described how deep the misperception runs: “Even when young adults were presented with a true median cost of an insurance policy, some participants still doubted us. This remains one of the biggest challenges for our industry to overcome.”

Fewer than 25% of Gen Z and millennial adults said they understood how life insurance underwriting works (the process that sets premiums based on age, health and lifestyle factors), per LIMRA's 2025 research. Without that foundation, young adults are left guessing what a policy would cost, and they guess high.

LIMRA's 2025 conference presentation found that 46% of respondents named not knowing how much or what type of coverage to get as a barrier. That outpaced perceived cost, cited by 33%, along with other financial priorities at 22% and procrastination at 21%. Respondents could name more than one barrier. The knowledge barrier and the cost barrier reinforce each other.

LIMRA's ownership data reflect that divide. Among Gen Z and millennial adults who own a policy, 47% described themselves as very or extremely knowledgeable about life insurance. Among young adults who said they needed coverage but didn't have it, 53% described themselves as not very knowledgeable. Social media has become a primary research channel: 80% of adults under 45 used it to research financial and insurance products in 2025, up from 29% in 2019, per LIMRA's 2025 Barometer.

More than half of millennials say they intend to buy a life insurance policy in the next 12 months, per LIMRA's data, with Gen Z numbers close behind. Ownership rates haven't moved to match. The 2025 Barometer puts Gen Z and millennial ownership below the 51% adult average despite years of stated intent to buy.

The purchase itself is where the process breaks down. One in three young adults says the main obstacle is uncertainty about what type of coverage to get or how much to buy. LIMRA's 2025 Barometer conference presentation found that 51% of young adults would use an AI tool to research a life insurance policy, and 55% would use one to shop for coverage. At the point of purchase, 42% said they'd prefer to complete the transaction with a financial professional in person. Research intent is high. A clear path to a decision isn't.

Term life insurance premiums rise with age, and health changes over time can push applicants into higher rate classes. A 25-year-old who buys a $500,000, 20-year term policy locks in rates at the lowest level that the applicant is likely to see. High blood pressure, high cholesterol, a history of anxiety or a weight change between ages 25 and 35 can each move an applicant into a costlier underwriting class and raise premiums across the full policy term. Waiting a decade to buy means paying more for the same death benefit.

Term length is the other variable to weigh. A 20-year policy bought at 25 expires at 45, which may fall short of covering a mortgage taken out in the late 20s or children still in school at that age. Financial planners who advise young adults with dependents or long-term debt often recommend a 30-year term, or re-applying at 35.

MoneyGeek's life insurance calculator helps illustrate how age, health and income translate into a coverage amount and term length. The cheapest life insurance companies guide shows that for many healthy adults in their 20s, a $500,000 policy costs far less than most assume before looking up the price.

Two different measures of life insurance ownership inform this article, and they're not directly comparable. Historical figures from 1989 to 2022 come from Federal Reserve Survey of Consumer Finances data, which tracks household ownership (meaning whether anyone in a household holds a policy), as compiled by the Federal Reserve Bank of Chicago and the American Council of Life Insurers 2025 Fact Book. LIMRA's 2025 Insurance Barometer tracks individual adult ownership through an annual survey of adults ages 18 to 75.

All premium figures from the LIMRA 2026 Barometer conference presentation refer to a $250,000 policy scenario for a healthy adult under 31. Premiums vary by insurer, state and individual health profile.