Here's something that might surprise you: if you're a healthy 30-year-old millennial, a $250,000 life insurance policy probably costs less than your monthly streaming subscriptions combined. We're talking $25-30 a month. Yet somehow, nearly half of millennials think life insurance is way too expensive to even consider.
This disconnect is part of what experts call the "millennial coverage gap." About 54 million Gen Z and millennial adults know they need life insurance. Many just haven't gotten around to buying it yet. Maybe you're waiting until you buy a house, have kids, or reach some other milestone that feels more "adult." The irony? The longer you wait, the more expensive coverage becomes—and the more you might actually need it.
Let's clear up the confusion and talk about why 2025 might be the perfect time for millennials to finally check life insurance off that mental to-do list.
The Real Cost of Life Insurance (Spoiler: Way Less Than You Think)
If you're like most millennials, you probably think life insurance costs hundreds of dollars a month. The reality is wildly different. Research from LIMRA found that adults age 30 and younger overestimate the cost of a basic term life policy by 10 to 12 times what it actually costs. That's not a typo—people think it's literally ten times more expensive than it is.
Here's what you'll actually pay in 2025 for a $500,000 20-year term life insurance policy if you're a healthy non-smoker: at age 25, expect around $20-25 per month. At age 30, you're looking at $23-28 monthly. Even at 40, most people pay $33-40 per month. For many millennials, that's less than a weekly coffee habit.
The key word there is "term" life insurance. This is the type most millennials choose because it's straightforward—you pick a coverage amount and a time period (usually 10, 20, or 30 years), and if you die during that time, your beneficiaries get the money. No complicated investment components, no confusing clauses. Just simple protection when you need it most, which for most people is while you're working, paying off debt, or raising kids.
Why Millennials Actually Need Life Insurance (Even Without Kids)
There's this persistent myth that you only need life insurance if you have children. But think about it: do you have student loans? A mortgage? A car payment? Credit card debt? If you died tomorrow, would someone else be stuck with those bills? Would your parents have to pay for your funeral while grieving?
The average cost of a funeral in 2025 runs $7,000 to $12,000. Most people don't have that sitting in savings, ready to go. Life insurance means your family won't have to scramble or go into debt during the worst time of their lives. And here's something many people don't realize: if you have a partner—married or not—who depends on your income to cover rent, utilities, or other shared expenses, they'd be in serious trouble without your paycheck. Life insurance replaces that income.
Millennials are also delaying traditional life milestones. Rising housing costs and wages that haven't kept pace with inflation mean many people in their 30s and even 40s are postponing homeownership and parenthood. But waiting for those milestones to get insurance actually works against you. Every year you age, premiums go up. Lock in a low rate now while you're young and healthy, and you'll pay that same rate for the entire term—even if you develop health issues later.
Shopping for Life Insurance in 2025: The Digital Advantage
Good news for anyone who'd rather avoid awkward sales pitches: buying life insurance has finally caught up with how millennials actually want to shop. Research shows 95% of millennial adults start their life insurance search online. And for the first time since studies began tracking this in 2010, more people prefer to research and buy life insurance digitally than through traditional agents—32% prefer the online route.
Many insurers now offer instant quotes online, and some can approve your application in as little as 24 hours with no medical exam required for certain coverage amounts. You answer health questions online, the insurer checks databases like your prescription history and driving record, and if everything looks good, you're approved. The entire process can take less time than binge-watching a season of your favorite show.
That said, there's still a knowledge gap. Less than a quarter of millennials say they understand the underwriting process (how insurers decide whether to approve you and what to charge). About a third aren't sure how much coverage they need or what type to buy. This is exactly why 70% of people say they'd be more likely to buy life insurance if they better understood the options. The information is out there—you just need to know what you're looking for.
How Much Coverage Do You Actually Need?
This is where a lot of people get stuck. The old rule of thumb says you need 10 times your annual salary in coverage. So if you make $50,000 a year, you'd want $500,000 in life insurance. But that's just a starting point. A better approach is to calculate what financial obligations you'd leave behind.
Add up your debts: mortgage balance, car loans, student loans, credit cards. Then think about ongoing expenses: how many years of living expenses would your family need to replace your income? Don't forget one-time costs like funeral expenses. Subtract any existing savings or life insurance you already have through work. The result is roughly how much coverage you need.
For term length, think about your timeline. If you have 25 years left on your mortgage, a 30-year term makes sense. If you just want coverage until your kids finish college in 15 years, a 20-year term works. Many millennials opt for 20 or 30-year terms because they offer flexibility at an age when life circumstances can change quickly.
Getting Started: Your Next Steps
If you've made it this far, you're already ahead of the curve. Here's how to actually get this done without it becoming another thing on your someday-maybe list.
First, get a few quotes online. Most insurers let you get an estimate in under five minutes. Compare at least three companies—rates can vary significantly even for identical coverage. Look for insurers with strong financial ratings (A.M. Best ratings of A or higher) so you know they'll be around to pay claims decades from now.
When you apply, be honest about your health history. Yes, they'll find out if you lie—insurers check medical records and prescription databases. Minor health issues usually don't disqualify you; they might just affect your rate class. If you have significant health problems, consider working with an independent agent who can shop multiple insurers to find one that's more lenient about your specific condition.
Finally, don't overthink it. Perfection is the enemy of good enough here. A policy that's 80% ideal but that you actually buy is infinitely better than the perfect policy you never get around to purchasing. Nearly 70% of adults under 40 recognize that life insurance is essential for financial health. The difference between them and people who actually have coverage? The ones with coverage just went ahead and did it.
Your future self—and your loved ones—will thank you for taking care of this now, while it's cheap and easy. Life insurance might not be exciting, but neither is brushing your teeth. You do it anyway because it prevents bigger problems down the road. Same principle applies here.
