Is life insurance cheaper than coffee?
Every September, Life Insurance Awareness Month reminds us to pause and reflect on one of the most important financial decisions families can make: protecting their future. Yet one persistent myth continues to hold younger adults back from getting the coverage they need: the belief that life insurance is too expensive.
According to new data from LIMRA, adults age 30 and under overestimate the cost of life insurance by 10 to 12 times. In other words, many young people assume coverage costs hundreds of dollars a month, when in reality, premiums for a healthy 25-year-old can be as low as $9-$12 per week.
That disconnect represents both a growing gap and a growing opportunity. For advisors, the challenge is clear: it’s not that young adults can’t afford life insurance. It’s that they don’t realize they can.
The psychology of pricing: Why perception doesn’t match reality
Behavioral economists often point to the concept of “anchoring” to explain why people misjudge costs. When consumers think of life insurance, they anchor the idea to big, long-term expenses — mortgages, car payments or medical bills. The assumption becomes: If it’s long-term, it must be expensive.
But the comparison doesn’t hold up. Younger adults are spending freely on discretionary items every week:
- $21 on coffee
- $35 on fast food
- $46 on streaming subscriptions
When you line those up against the cost of life insurance, the value proposition becomes strikingly clear. The gap isn’t financial. It’s psychological.
For advisors, that’s an opportunity to reframe the conversation. Instead of asking someone to add “another bill,” show them how a small shift in discretionary spending could secure lifelong protection.
The cost of waiting to buy life insurance
There’s another element that young adults often miss: Buying life insurance early is one of the smartest financial moves they can make.
Premiums are lower, underwriting is simpler and in many cases, you can lock in a level rate that lasts for decades. For example, if a 25-year-old allots $20 a month for coverage, they may secure significantly more protection than if they wait until 35, when rates increase and health risks begin to emerge.
It’s one of the rare areas in personal finance where youth is truly an advantage. Delay, however, has consequences. LIMRA’s Insurance Barometer Study highlights that nearly 40% of U.S. households would face financial hardship within six months if a primary wage earner died. The stakes couldn’t be higher.
Signs of interest among younger buyers
The misconception isn’t universal. Data also shows that younger adults are open to the idea of life insurance — they just need the right framing. LIMRA research finds that half of millennials and Generation Z consumers rate life insurance as a top topic they want to discuss with an advisor.
Trustmark’s own data supports this. Roughly 22% of our universal life purchasers are between the ages of 20 and 29. That tells us there’s real demand among younger buyers. The challenge is unlocking it with the right education and positioning.
What advisors can do differently
So how do we reframe the story? A few strategies stand out.
- Make it relatable. Compare premiums to everyday purchases. Saying coverage costs “$12 a week” resonates more than “$48 a month.” People can picture a few cups of coffee. They can’t picture an abstract premium line item.
- Lead with value, not obligation. Young adults aren’t just buying protection for today — they’re buying peace of mind for the future. Framing coverage as a way to lock in low rates and maximize financial flexibility can resonate more strongly than traditional “what if” scenarios.
- Educate on timing. Many young adults don’t realize the long-term financial benefits of buying early. Demonstrating side-by-side comparisons — what $20 buys at age 25 vs. at age 35 — can be an eye-opener.
- Position it as empowerment. Instead of portraying life insurance as a safety net, show it as an investment in independence and financial control. Younger buyers want to feel empowered, not pressured.
Life Insurance Awareness Month as a catalyst
Life Insurance Awareness Month is more than a reminder; it’s a chance for the industry to reset the conversation. It’s a moment when advisors can spotlight education, demystify costs and connect with a generation that is ready — but hesitant.
The reality is simple: Life insurance is often far more affordable than younger adults think. The challenge is not affordability but awareness.
By reframing the value of coverage in everyday terms and emphasizing the advantages of buying young, advisors can help close the protection gap while giving a new generation the financial security it deserves.
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