The views presented here do not necessarily represent those of Advisor Perspectives.
As younger generations are more often delaying life milestones, like marriage, parenthood and homeownership, advisors may need to adjust their conversations with millennial and Gen Z clients. They are dealing with their own unique challenges and may hold different ideals around work and fulfillment that can impact the way advisors manage their practices.
“It’s important to explain to people what their benefits are,” Marguerita Cheng, CEO of Blue Ocean Global Wealth, said.
“Gen Z and Millennials are wanting to chart their own course, and be a part of the gig economy, but it’s important to discuss cash reserves with them and also insurance for protection and risk management,” Cheng said, noting life insurance and rental insurance as priorities.
A recent study by IT services and consulting company Capgemini revealed that consumers under 40 are “delaying or skipping the traditional triggers for purchasing life insurance,” a release for the report said.
After polling over 6,100 people aged 18 to 39, the company found that one of the biggest barriers to younger consumers purchasing life insurance was a “misalignment with their current stage in life” (32%), followed by insurance premium costs (28%).
Meanwhile 53% of life insurance executives who were polled for the report (200 senior executives across 18 markets), said that delayed life milestones were a major factor that shaped their long-term strategies for under-40 consumers.
“Under 40s seek financial tools that deliver value throughout their lives — not just at death,” the report said. “Living benefits can help evolve traditional life insurance from a product that customers buy and forget into an active financial tool that promotes financial wellness and helps them live well for longer.”
“Financial flexibility around life events, support for wellness, and aid during a critical illness are the living benefits under 40s appreciate the most,” the report said.
Higher Debt, Financial Education Needs
From Cheng’s perspective, we are living in a period where “the need for life insurance is greater than ever, because of higher student loan debt and mortgage debt.”
“But we are in a time where people may not understand (life insurance), so they think they don’t need it,” she added.
“Ownership of life insurance probably is on the decline because younger generations are reaching these milestones later on, or they are choosing not to have these life events,” Cheng said.
“Some people don’t understand what their job benefits are. They may say, ‘I’m not married, so I don’t need life insurance.’ Maybe you need it, maybe you don’t. But if you were to leave this world, is there anyone or any people who are depending on you? You might not be married, but particularly for people who are first-generation college grads, you may have people in your life who you love who may still need assistance,” Cheng said.
Research shows that younger adults (millennials and Gen Z) often greatly overestimate the costs of life insurance, by as much as 10 to 12 times the actual cost of a policy, a survey by nonprofit associations LIMRA and Life Happens found.
The 2025 insurance study revealed that one of the top reasons young adults don’t own life insurance (or own more coverage), is due to perceived costs. Nearly half of millennial respondents (48%), and 39% of Gen Z respondents, noted costs as a concern.
“There appears to be some ‘too good to be true’ thinking that complicates their purchase decisions,” said Bryan Hodgens, senior vice president, head of LIMRA Research, in a statement for the survey release. “In a separate qualitative LIMRA study, 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 — convincing consumers that life insurance is far more affordable than they realize.”
Highlight Employer Benefits
From a practice management standpoint, advisors may want to set aside more time to make sure clients thoroughly understand their employer’s benefits.
Cheng notes that standard life insurance policies offered by many employers can aid in financial planning.
“Some people get up to $50,000 group term life insurance through their employer, which isn’t taxed. But if people don’t understand what they have, this is an opportunity for advisors to help clients understand,” Cheng said.
“One solution that I encourage people to think about is to take advantage of, or find out, what your job offers you. Just remember if you change jobs, it’s important to have some coverage that’s individual that you can take with you wherever you go. You can pay a little more, anywhere from 5% to 10% more, for convertible term life insurance. It’s still term life insurance, but it allows you to convert your term insurance policy to a permanent one before the term expires,” she explained.
“With convertible term insurance, you may not have to go through medical underwriting again, which is huge. When you’re younger, underwriting may be a bit easier,” Cheng said.
Confusion Around Insurance
A 2024 survey by Corebridge Financial found that many Americans don’t understand life insurance provisions.
Furthermore, half of respondents (out of over 2,200 adults polled) said they were uninsured, while 9% didn’t know if they had life insurance. However, a sizable group of younger Americans (18% of respondents aged 18-44) said they were in the market to purchase a life insurance policy, the survey found.
“Education about affordability and flexibility of options could help those who are unsure get protection for themselves and their families,” the survey said.
In addition to life insurance, advisors need to review other financial literacy topics with younger individuals, like 401(k) matching. These topics are likely to arise when providing multigenerational advice for families, according to Cheng.
“I had one client’s daughter who didn’t know what her company’s 401(k) match was. The daughter eventually became a client too. She also had two 401(k) accounts from her old jobs that she needed to find, and her husband had one too,” Cheng shared.
“As far as practice management, this is a way you could build a connection with the next generation,” she said.
Danielle Walker is a freelance journalist with 15 years of business reporting experience. She previously worked at Business Insider and Pensions & Investments, among other business publications. Her work has been published in the Financial Times, Barron’s and Chief Investment Officer. Danielle is currently based in Norfolk, Virginia.
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The views presented here do not necessarily represent those of Advisor Perspectives.
