Young adults have an upper hand when buying life insurance — they typically qualify for low-cost coverage due to their long life expectancies. But despite this advantage, a new survey by NerdWallet shows that younger generations are more likely than their elders to have hesitations about buying coverage.

Sarah Fitch, a 23-year-old communication specialist in Ohio, finds the idea of buying life insurance overwhelming. “I’m afraid of getting the wrong policy or not getting enough coverage or getting an overpriced policy for low coverage,” she says.

According to the survey, 86% of Generation Z (ages 18 to 25) and 77% of millennials (ages 26 to 41) say they have hesitations about purchasing life insurance, compared with 76% of Generation X (ages 42 to 57) and 70% of baby boomers (ages 58 to 76). The survey, conducted online by The Harris Poll in February 2022, involved more than 2,000 U.S. adults 18 and older.

Fitch says one of her main hesitations is the price of coverage. In the survey, 27% of Americans say they worry about being able to afford monthly premiums, making it the most commonly selected hesitation. Her lack of life insurance knowledge and time to do the research are other reasons Fitch hesitates to buy.

“It’s not something I guess that 20-year-olds think that they need to do right now,” Fitch says, “even though it’s very important and should be discussed, especially at a young age.”

Fears about getting it wrong

Of Americans who have not purchased life insurance, 23% of Gen Z and 17% of millennials worry about picking the wrong death benefit amount, compared with just 7% of baby boomers, according to the survey. One in 10 Gen X Americans (10%) had the same concern.

Overall, confidence in the shopping process is also lower among young adults. Nearly a third of baby boomers (32%) who have not purchased a policy say they are very confident in their ability to select the correct coverage type to suit their needs, 13% of Gen Z, 20% of millennials and 15% of Gen X say the same.

Confidence levels do not necessarily improve after buying a policy. Ally Kotwica, a 26-year-old marketing director in New Mexico, has purchased life insurance, but she wonders if there was a better use of that money.

“My husband and I got married in 2020, and my parents had always said when you get married, you should get life insurance,” Kotwica says. She believes she made a safe choice, but she doesn’t feel completely confident it was the best decision.

Making big financial decisions can be intimidating. The key is to educate yourself: learn about the different types of life insurance and compare quotes from insurers. That way, you can understand your options and make the most informed choice when it is time to buy.

Buyers typically choose between two main types of coverage, term and permanent. Term life is sufficient for most families. It lasts for a set period of time, such as 10 or 20 years, and is generally cheaper than permanent coverage. Permanent policies, such as whole life insurance, last your entire life and often include a cash value investment account, which you can tap into while you are still alive.

Concerns about qualifying for coverage

According to the survey, 21% of Gen Z and 16% of millennials say they are concerned they would not qualify for coverage, while only 7% of baby boomers say the same. Eleven percent of Gen X had the same concern. However, the younger and healthier you are, the more likely you are to qualify for low-cost coverage.

When you apply for a policy, the insurer typically looks at your age and health to determine your life expectancy. The higher your life expectancy, the less risk you are to insure, which means lower rates. For example, the average life insurance rate for a $500,000, 20-year term life policy for a healthy 30-year-old applicant is $210 a year, according to Quotacy, a brokerage firm. To compare, the average annual premium for a healthy 50-year-old buying the same coverage is $744.

Do you need life insurance?

Buying life insurance can be a daunting process, especially if it’s your first time shopping for coverage and you don’t know where to start. In general, life insurance is necessary only if your death would create a financial burden on others.

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

When deciding if you need life insurance, consider speaking with a fee-only financial advisor. These advisors receive a flat fee, not a sales commission, so the advice they give isn’t influenced by the type or amount of coverage you buy.