Sarah Fitch, a 23-year-old communication specialist from Ohio, finds the prospect of purchasing life insurance intimidating. "I'm afraid of getting the wrong policy, not getting enough coverage, or paying too much for too little coverage," she says.

According to the survey, 86% of Generation Z (ages 18 to 25) and 77% of millennials (ages 26 to 41) are hesitant to purchase life insurance, compared to 76% of Generation X (ages 42 to 57) and 70% of baby boomers (ages 58 to 76). More than 2,000 U.S. adults 18 and older participated in the survey, which was conducted online by The Harris Poll in February 2022.

One of Fitch's main reservations is the cost of coverage. According to the survey, 27 percent of Americans are concerned about being able to afford monthly premiums, making it the most frequently chosen hesitation. Fitch is also hesitant to purchase life insurance due to a lack of knowledge and time to conduct research.

"I guess 20-year-olds don't think they need to do it right now," Fitch says, "even though it's very important and should be discussed, especially at such a young age."

Fears about getting it wrong

According to the survey, among Americans who have not purchased life insurance, 23 percent of Gen Z and 17 percent of millennials are concerned about selecting the incorrect death benefit amount, compared to just 7 percent of baby boomers. One in ten Gen X Americans (10%) expressed the same concern.

Overall, young adults have less trust in the shopping process. Nearly one-third of baby boomers (32%) who have not purchased a policy are very confident in their ability to select the appropriate coverage type to meet their needs; 13 percent of Gen Z, 20 percent of millennials, and 15 percent of Gen X are similarly confident.

After purchasing a policy, confidence levels do not always improve. Ally Kotwica, a 26-year-old marketing director in New Mexico, has purchased life insurance, but she wonders if there could have been a better use of her money.

"My husband and I are getting married in 2020, and my parents always told me that when you get married, you should get life insurance," Kotwica says. She believes she made a sound decision, but she isn't convinced it was the best one.

Making large financial decisions can be frightening. The key is to educate yourself: learn about the various types of life insurance and compare insurer quotes. When the time comes to buy, you'll be able to understand your options and make the best decision possible.

Buyers typically have two options for coverage: term and permanent. For most families, term life insurance is adequate. It is typically less expensive than permanent coverage and lasts for a set period of time, such as 10 or 20 years. Permanent policies, such as whole life insurance, cover you for the rest of your life and frequently include a cash value investment account that you can access while you're still alive.

Concerns about qualifying for coverage

According to the survey, 21% of Gen Z and 16% of millennials are concerned about not qualifying for coverage, while only 7% of baby boomers are concerned. Eleven percent of Generation X expressed the same concern. The younger and healthier you are, however, the more likely you are to be eligible for low-cost coverage.

When you apply for a policy, the insurer will typically consider your age and health to calculate your life expectancy. The longer you live, the less risky you are to insure, resulting in lower rates. According to Quotacy, a brokerage firm, the average life insurance rate for a $500,000, 20-year term life policy for a healthy 30-year-old applicant is $210 per year. In comparison, the average annual premium for the same coverage purchased by a healthy 50-year-old is $744.

Do you need life insurance?

Purchasing life insurance can be a daunting task, especially if it is your first time looking for coverage and you are unsure where to begin. Life insurance is generally required only if your death would place a financial burden on others.

Life insurance can help cover expenses for family members who rely on your income if you die unexpectedly. It can also be used to repay debts that would otherwise be borne by others, such as a mortgage.

Consider speaking with a fee-only financial advisor when deciding whether you need life insurance. These advisors are paid a flat fee rather than a commission, so the advice they provide is not influenced by the type or amount of coverage you purchase.