Millennials in the United States—those born between 1981 and 1996—are now in their late 20s to early 40s. This generation is buying homes, starting families, and building businesses. Yet, many millennials still overlook one crucial piece of financial planning: life insurance.
According to recent surveys, nearly 45% of millennials in the U.S. have no life insurance coverage at all, while others rely solely on small employer-provided policies. Unfortunately, this could be a costly mistake for a generation already navigating rising living costs, student loan debt, and economic uncertainty.
If you’re a millennial asking, “Do I really need life insurance?” the answer is yes. And here’s why.
This article breaks down the top 5 reasons millennials should not skip life insurance in 2025, how much coverage they need, and which type of policy fits their lifestyle.
Why Millennials Skip Life Insurance (and Why That’s a Problem)
Before diving into the reasons to buy coverage, let’s quickly look at why millennials avoid life insurance:
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They believe it’s too expensive.
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They think they don’t need it until they’re older.
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They rely on employer-provided coverage.
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They assume being single means no need for life insurance.
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They don’t understand how policies work.
But here’s the truth: life insurance is cheaper when purchased young and healthy—and delaying it could cost millennials thousands of dollars over their lifetimes.
1. Life Insurance Is More Affordable for Millennials Than Any Other Generation
One of the biggest myths about life insurance is that it’s expensive. In reality, millennials are in the prime age bracket to lock in low premiums.
Example of Term Life Premiums (Non-Smoker, Healthy Male):
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Age 30: $500,000 coverage for 20 years → $20–$25/month
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Age 40: Same coverage → $40–$50/month
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Age 50: Same coverage → $100–$150/month
👉 The difference? A millennial buying today could save thousands of dollars over the life of the policy compared to waiting until their 40s or 50s.
Why This Matters:
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Premiums are based on age, health, and risk.
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Buying coverage now means locking in low rates before health issues or aging make it more expensive.
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Millennials with medical conditions later may face high premiums—or even denial.
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2. Millennials Carry Significant Debt That Could Burden Loved Ones
The millennial generation is often called the “debt generation.” According to Federal Reserve data:
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Average millennial student loan debt: $38,000+
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Average credit card debt: $5,500
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Average mortgage debt: $230,000+
Without life insurance, these debts don’t just disappear. In many cases, cosigners, spouses, or family members may still be responsible.
How Life Insurance Helps:
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Pays off outstanding student loans.
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Covers credit card balances and auto loans.
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Protects co-borrowers from inheriting debt.
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Ensures family doesn’t lose a home due to unpaid mortgage.
Example: A 32-year-old millennial with $300,000 mortgage debt could buy a 20-year term policy for $500,000 at just $25–$30/month, ensuring the house is safe for their family even if tragedy strikes.
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3. Millennials Are Starting Families and Need Income Protection
More millennials are now parents. Raising kids in the United States is expensive—over $300,000 per child (excluding college) according to USDA estimates.
Why Life Insurance Is Critical for Millennial Parents:
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Covers day-to-day living expenses for spouse and children.
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Pays for childcare, healthcare, and education costs.
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Provides financial stability if one parent passes away.
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Prevents surviving spouse from being forced back to work immediately.
Even stay-at-home parents need coverage. Their unpaid work—childcare, cooking, household management—would cost tens of thousands per year to replace.
👉 A $1M life insurance policy may sound like a lot, but in reality, it often just covers 10–12 years of family expenses for middle-class households.
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4. Employer Coverage Alone Isn’t Enough for Millennials
Many millennials rely on group life insurance provided by employers, but this can be risky.
Problems with Employer Life Insurance:
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Coverage is usually 1–2x your salary—far below what families need.
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The policy often ends if you quit or change jobs.
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Millennials, who switch jobs more frequently, may lose coverage unexpectedly.
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Employer coverage may not be portable, leaving you uninsured during transitions.
Real Example:
A 30-year-old earning $70,000/year with 2x salary employer coverage only has $140,000 of insurance. If they pass away, that amount may cover a few months of expenses but won’t support a family long-term.
👉 Buying an individual life insurance policy ensures your family is always protected, no matter where you work.