Less than half of millennials have life insurance — here's why that's a problem (2024)

Less than half of millennials have life insurance, according to a survey conducted by insurance-comparison website Insuranks. Of 1,000 respondents born between 1981 and 1996, only 47% said they had a policy.

That's not to say Generation Y isn't interested in life insurance: In fact, 48% of those without coverage said they wanted it. The chief obstacle they cited was cost, with 66% saying premiums were too expensive. Nearly a third (29%) said they were overwhelmed by the complexity involved in choosing a policy.

Only 36% said they didn't have life insurance because they didn't have a family to support.

One out of two married millennials surveyed said they would experience financial hardship within six months if their spouse died. One out of six said it would only take a month.

Below, CNBC Select looks at why life insurance can be essential —even for younger people — and how to find affordable coverage.

Millennials are at a stage of life where they may be planning to or have already started a family. If you have people who financially depend on you, such as a spouse or children, leaving them without support is a serious risk. An adequate life insurance policy can cover outstanding debts and provide replacement income.

Even if you don't have a family, insurance can pay for your funeral and burial. That's the leading reason millennials buy life insurance, according to the survey. With funerals averaging more than $8,000, that can be a real hit to those you leave behind.

Life insurance is also cheaper and easier to get when you're younger. While many factors go into determining premiums, age plays a significant role. It may seem challenging to add yet another bill to your budget, but it will save you money in the long run.

Life insurance doesn't have to be expensive. If you're looking for affordable coverage, consider term life insurance, which covers you for a specific period — usually between 10 and 30 years. If you pass away while your policy is active, your beneficiaries receive a death benefit.

Term life is significantly cheaper than whole life insurance, which provides lifelong coverage: A 30-year-old nonsmoker will pay $26 per month on average for a 20-year term life policy with a $500,000 payout, accordingtoPolicygenius. That's compared to $440 a month for whole life insurance with the same payout.

For those looking for an inexpensive term life policy, CNBC Select recommends Guardian, which has competitive rates and earns high marks for financial strength. Guardian offers several types of policies — including term, whole and universal insurance — and you can even convert a term insurance policy to whole life in the first five years.

State Farm ranks highest for customer satisfaction, according toJ.D. Power's individual life insurance study.It offers affordable premiums for term life policies, especially if you qualify for abundling discount.

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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every insurance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products.While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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