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Closing the Generational Life Insurance Gap with Education

Samantha Chow
26 July 2023

The percentage of Americans covered by life insurance has been steadily decreasing since the 1970s.

My family is no exception.

Traditionally, newborn life insurance policies protected against the financial burden of death. My great-grandmother purchased a $1,500 life insurance policy for my grandmother when she was born. When my mother was born, her grandmother bought one for her. Even my brother, only ten years older than me, has been insured since birth. As a child of the ‘70s, though, I was the first in generations not to be insured in childhood.

Significant advances in healthcare, changes in the socioeconomic and demographic characteristics of the population and lower war casualty rates have led many to experience mortality resistance. Despite the recent pandemic, the threat of death feels less imminent than it once did and today, we are more likely to be able to cover the costs of a funeral. Therefore, the urgency to insure the lives of our loved ones — and especially youngsters — has subsided.

Ultimately, this change has led to a startling reality: Less than 60% of Americans are currently covered by life insurance — a number that has declined steadily since 1971, with a 13% reduction in the last decade alone.

Mortality resilience and the growing generational wealth gap

American adults continue to put short-term priorities ahead of saving for retirement or planning for a catastrophe. They prioritize vacations (29%), recreational activities (23%), and paying monthly bills (49-60%). Along with believing life insurance coverage is “too expensive,” many say they have “other financial priorities”  beyond saving for what’s next. As a result, less than half of Millennials and Gen Zers currently have a life insurance policy.

And yet, global mortality resilience, a measurement of how resilient we are to death, is low, at just 43%, and the global mortality protection gap hit a record $406 billion last year. Both are key indicators that households are more vulnerable than ever to the loss of a breadwinner.

At the same time, the majority of seniors today have life insurance coverage. And with the payout of their policies, we are about to experience the greatest wealth transfer the world has ever seen. The result is record-breaking distribution rates of death benefits, with approximately $89 million in 2022, compared to $76 million paid out in 2019.

The question is: Will the beneficiaries of these policies — often Millennials and Gen Xers —reinvest in securing their futures, and the future of those after them, with proper life insurance coverage?

Meeting the needs of the next generations

Meeting the needs of the next generation will require education and innovation.

For one, it is our responsibility to teach Millennials, Gen Xers (and younger generations) that the true value of a life insurance policy is not only realized after one’s death but can also serve as income replacement, an investment vehicle, cover long term care — and more.

We also need to build a library of policies that match the lifestyle choices of Millennials and Gen Xers to help bridge the gap. If Gen X wants to save, pay their bills and retire early, then maybe carriers need to reconsider offering a Return of Premium Term, for example, that returns the policy premium if the insured outlives the term.

Here are examples of how two life insurance companies are already bridging the life insurance gap with education and product — across the generational and financial divide:

  • Kemper Life Insurance : With a focus on low-income communities, Kemper’s engagement approach is very personal. They provide door-to-door sales and premium collection services, establishing face-to-face relationships with their customers. While many are not in the financial position to purchase large life insurance policies, Kemper’s goal is to help customers make the right financial decisions for their security whether it be life, accident and health or contents coverage.
  • Prudential Financial : Prudential’s Stages for Retirement education program is designed to help younger generations prepare for retirement at every stage by providing personalized projections on how much they will need for retirement, which products will help them meet these projections over time and advice on how to reach savings goals throughout their lives.

To move forward, we need to take a step back and reeducate everyone on the value of income replacement, debt payment, and cash value opportunities within life insurance policies, and to provide products that fit today’s needs. The true value of life insurance has not changed; it’s been forgotten. It’s our job to help everyone remember.


Samantha Chow

Samantha Chow

Global Head, Life Insurance, Annuities, and Benefits Leader, Capgemini Financial Services
Samantha has over 20 years of experience in the L&A and A&H industries working for carriers in positions across the value chain, evaluating technology and consulting as an industry analyst, and leading the technology roadmap for policy administration systems.