Insurers Struggling to Sell Life Insurance To Under-40s: Reasons Point to Tectonic Societal Shift

For decades, marriage and children were the two milestones that nudged Indians to buy life insurance. But that pattern is shifting fast. A new report shows younger generations are delaying, and in many cases, skipping these traditional life triggers, leaving the industry struggling to make its case to the under-40 population.

The World Life Insurance Report 2026 by Capgemini Research Institute and LIMRA shows this growing paradox. While 68 per cent of adults under 40 say they see life insurance as essential for a financially secure future, the adoption for such protection plans is lagging. Among those surveyed, 63 per cent had no immediate plans to marry, and 84 per cent had no plans to have children anytime soon.

Without these classic motivators, life insurance is not seen as urgent, and other financial products are taking priority.

Why is this a cause of concern?

The numbers reveal why insurers are worried. Life insurance’s share in individual investment portfolios has dropped 23 per cent over the last 15 years, while equities have grown by 31 per cent.

Younger consumers compare policies not just against protection, but against options that offer faster, more tangible value like digital investments or wellness subscriptions.

For many, however, the barriers are structural. One in four under-40s cites confusing processes and dense jargon as reasons to reject life insurance. Others feel the product doesn’t match their life stage (32 per cent), is too expensive (28 per cent), or doesn’t offer enough immediate benefits (25 per cent).

Instead, they want “living benefits”: features they can access during their lifetime, from wellness rewards and flexible coverage to funds for education, childcare or even fertility treatments.

This preference for near-term value comes at a time of immense wealth transition. Over the next two decades, millennials and Gen Z are expected to inherit an average of USD 106,000 each.

Interestingly, 40 per cent of respondents still rank life insurance and annuities as a key part of their inheritance planning, after stocks and cash savings.

In other words, they are not rejecting the concept of insurance, but demanding a redesigned version that matches their financial realities

What are the other roadblocks hampering the uptake of life insurance?

The report points to technology and distribution gaps as well. Nearly 60 per cent of under-40 consumers want direct digital engagement with insurers, but just 31 per cent of carriers provide robust platforms. And while 44 per cent of young employees want policies that move with them when they change jobs, only 19 per cent of insurers offer portable coverage.

Insurers are beginning to respond. Globally, 45 per cent of companies are redesigning their products with living benefits at the core. Some are experimenting with gamified wellness tools and hybrid digital-human advisory models. Yet the transformation is far from complete.

For India, the challenge is sharper and the opportunity larger. With its youthful population and rising incomes, the market could expand rapidly if insurers manage to make life insurance relevant again.

That means simplifying products, stripping away jargon, and embedding insurance into the financial ecosystems that younger consumers already use, whether digital banks, HR platforms, or wellness apps.

As the report concludes, the next generation is not asking whether life insurance matters; they already believe it does. What they are questioning is whether today’s policies are designed for their lives.

Until insurers bridge that gap, many Indians under 40 will keep postponing the purchase, just as they are postponing the milestones that once made life insurance unavoidable.