Life insurers need to redesign products to lure the under-40 generation

Life insurers know they must reach the under-40 age demographic. According to U.S. Census data, the millennial and Gen Z (ages 13-44) groups account for nearly 43% of the population in 2025.

They are the future generation of life insurance and annuity customers. And they will come to those products with different needs, demands and ways of communicating.

Bryan Hodgens, senior vice president, head of research, LIMRA and LOMA, hosted a panel Monday on “global strategies” for attracting the under-40 generation during the LIMRA 2025 Annual Conference.

“This is the new market that insurers have to look at, and it's a significantly different group of people than maybe they had been looking at in the insurance industry years ago,” Hodgens said during a pre-conference interview with InsuranceNewsNet.

Hodgens will moderate a discussion between Luca Russignan, head of insurance for Capgemini, and Aaron Seurkamp, senior vice president and president, Protection & Retirement Division, for Protective Life Insurance Co.

LIMRA partnered with Capgemini on research into the under-40 generation. The survey included more than 6,000 people, ages 18 to 39, in 18 markets across the world, Hodgens explained. Researchers also surveyed more than 200 insurance executives in 18 different markets.

Among the lessons learned, the research found that many younger people believe the economy will be slowing, which will affect disposable income decisions, Hodgens said. “How does life insurance fit in with this?” he asked.

Also, the proportion of under-40 adults will decrease from 49% to 42% of the overall global population. That decrease is projected over the next 25 years, Hodgens said.

'Getting shifted down'

Beyond the raw data, however, is a new reality with the younger generations, Hodgens said. They are living life differently from the way humans have for centuries.

"They're sort of reshaping the traditional life insurance triggers that we've seen in the past," Hodgens noted. "They're delaying getting married. They're delaying having children. And there are fewer marriages, and there are fewer children. So if those are the traditional life insurance triggering events, they're just sort of getting shifted down into a later point in the under-40 segment crowd."

The new normal calls for revolutionizing products, distribution, and engagement, Hodgens said. In addition to the disconnect between where younger people are in their life stage, the cost of life insurance is also a barrier to address.

Carriers likely need to think hard about reshaping how life insurance products are designed, Hodgens said.

"How do they redesign products to be much more modular in the way that the products are designed, and then are they designing them with some benefits that the consumer can use during their lifetime?" he asked rhetorically. "Is there flexibility in withdrawing cash for life stage events that are occurring? Is there a benefit, such as critical illness, inside the products that if I become terminally ill, can I take money out of this product to be able to take care of my health care costs?"

Wellness benefits are very popular with the younger set, he added, and might be another idea for carriers to explore in tandem with life insurance.

New ways of communication

Technology is another area in which life insurers need to be in lockstep with younger consumers who want new communication platforms. Multiple surveys confirm the desire for modern technology.

In Insurity’s 2025 Digital Experience Index: 28% of Gen Z and 21% of millennials have switched insurers because the online or mobile experience was frustrating.

Artificial intelligence is likely to play a role in how life insurers adapt to modern communication with younger consumers, Hodgens said.

"Behind the scenes is sort of a data analytics that AI is driving with identifying those life stage events and personalizing a message to these consumers in a way that feels right on time in that right digital type of environment," he said.

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