Personalized Life Insurance – Forbes Advisor

The current digital transformation in the life insurance industry will combine with better humanization in 2025, which means the future of life insurance is both digital and personal.

Consumers will seek convenient life insurance policies, including living benefits that offer more robust protection for future issues. If you plan to buy life insurance in 2025, this and other emerging trends may influence your experience.

Shift to Financial Planners for Advice

Buying life insurance online without talking to an agent has grown in popularity in recent years, but in 2025 more people may seek personalized expert advice.

“As we look to 2025, perhaps the most significant trend that will affect consumers is the shift from a push of a total online experience, with minimal agent involvement, to a demand for qualified and competent advice and guidance from a financial professional,” says Daniel Adams, an independent insurance agent at CEG Life Insurance Services.

This shift comes in the wake of changes in the online insurance marketplace. Some online insurance companies have closed or been bought out, says Adams. At the same time, older insurance agents are focusing on wealthy clients, which leaves a gap for younger, middle-class consumers.

Comprehensive financial planners are filling this void.

“Financial planning is growing as a profession, and those who are engaged in it are helping with all aspects of financial planning, including recommending life insurance,” says Adams. This trend is likely to grow stronger in 2025 and beyond.

What Does This Mean for You?

A 2024 Corebridge Financial study found that 21% of people weren’t certain if they needed life insurance. If you’re one of them, consider talking to a financial planner in addition to doing online research. A financial planner can help you understand how life insurance fits into your bigger financial plan and guide you through your options.

Evolving Product Features and Living Benefits

Many policies now offer more than just a traditional death benefit.

Living benefits in life insurance are policy features you can use while you’re still alive. For instance, many term life policies are now offering the option to add chronic and critical illness riders, which let you access benefits if you have a heart attack, stroke or other serious health problem.

“Over the past few years, there has started to be a shift of term products offering living benefits, or access to part of the insurance benefit prior to death,” says Adams.

Another new trend is in term life conversion, which lets you change your term life insurance to cash value life insurance without a new medical exam.

“While this is not a new benefit, it is somewhat being positioned like one as companies are starting to charge extra to add it to a term life policy,” Adams says.

Despite these valuable features, many shoppers may not fully understand them. The same Corebridge Financial study found that 60% of people incorrectly believe that term life insurance builds cash value. This further highlights the need for better education about different policy benefits.

What Does This Mean for You?

Expect to have more policy options as you shop for life insurance in 2025. However, don’t focus solely on the death benefit amount as you compare policies—consider living benefits and conversion options, too. These features can help you take better advantage of your existing life insurance in the future if your circumstances change.

Technology Is Making Life Insurance Easier To Buy

In 2025, the life insurance industry will continue to use new technology to make buying insurance easier for customers.

These changes are especially important for younger buyers. Gen-Z and Millennials, who are used to getting information quickly, are now at the age where they’re thinking about life insurance, says Heslin. The industry is trying to give them the kind of buying experience they expect.

Ed Kohlberg, director at credit rating agency AM Best, reinforces this trend, stating that “insurers have been taking on greater roles to help educate consumers on the importance of life insurance, with the goal of offering personalized solutions through seamless experiences.”

What Does This Mean for You?

Expect easier, faster application processes from many insurers in 2025 and for many types of policies (but not all). This might include:

1. Faster approval times using advanced data analysis and AI.
2. Applications you can fill out on your mobile phone in minutes.
3. Virtual health assessments instead of in-person medical exams in some cases.
4. Chatbots and AI-powered assistants to help you through the application.

These new technologies aren’t just convenient—they’re motivating people to buy. The Corebridge study found that 39% of people said they’d be more likely to buy a policy if they could get it within 24 hours.

But take note: Even though it’s easier to apply, it’s still important to understand what you’re buying. Don’t rush into a decision just because the process is quick. Make sure a policy fits your needs long-term before you buy it.

Economic and Government Changes Might Affect Life Insurance Choices

Another trend to watch for is government and economic changes that might impact how people think about life insurance. Todd Taylor, senior vice president and head of life insurance solutions at New York Life, says a new administration in 2025 could lead to “changes in the coming year that may impact how consumers think about the role of life insurance in their financial portfolios.

“This could influence the types of policies they choose, particularly when considering tax implications or potential impacts to estate and legacy planning,” says Taylor.

Taylor adds that life insurance can add stability and flexibility to estate planning, no matter what’s happening in the economy.

The state of the economy might also affect which types of life insurance are popular. For example, if the stock market is doing well, more people might be interested in policies that include an investment component, such as variable universal life insurance.

Taylor also mentions that whole life insurance can provide stability when interest rates are changing since whole life accumulates cash value at “consistently strong, steady, tax-advantaged returns with low correlation to equities over the long term.”

“In an environment where interest rates went to near zero in 2020 and 2021, then rose sharply to over 5% in 2022 and 2023, but now are declining again, the stability cash value life insurance provides can be an important component of a portfolio versus taking risk of the fluctuations of short-term interest rates,” says Taylor.

What Does This Mean for You?

It’s a good idea to stay informed about economic trends and tax rules that could affect your life insurance needs. Talking to a financial expert can help you understand these complex issues and ensure your life insurance purchase is the right one for the long haul.

How To Find the Best Life Insurance in 2025

Given these trends, here are several pieces of advice for those shopping for life insurance in 2025:

• Don’t wait. “Life insurance is most affordable when you’re young and healthy, so it’s best to take action now,” says Taylor. Buying early means lower prices and guaranteed coverage, even if your health changes later. Most Americans (80%) recognize that good health often leads to the cheapest life insurance rates, according to the Corebridge Financial study.
• Ask for help. Before choosing a financial advisor or insurance agent, ask about their experience, certifications and who they work for. “It will become more important than ever for consumers that are shopping for life insurance in 2025 to find an independent, experienced and educated agent who can assist them in understanding what product and insurance company is the best fit for their specific circumstances,” says Adams.
• Evaluate your whole financial situation. “When you’re purchasing life insurance, you’re putting one cornerstone down in a secure financial plan,” says Heslin. “Meeting with a financial professional and reviewing your entire financial situation can help ensure that the life insurance you’re selecting fits with where you’re at now and where you hope to be in the years ahead.”
• Look beyond price. Taylor recommends considering factors like the ability to convert term life policies, riders for chronic and critical illnesses, and flexible payment options when you compare life insurance quotes. For those buying permanent life insurance, understand internal policy charges and consider them as part of the overall cost of the policy.
• Check the insurance company’s strength. Look up the company’s financial ratings and ability to pay claims. You want to be sure they’ll be able to pay claims for many decades.
• Know the real cost. Many people overestimate the cost of life insurance. In fact, only about 1 in 10 Americans in the Corebridge Financial study correctly identified the approximate monthly cost of a term life policy for a healthy 30-year-old. Don’t let misconceptions about cost prevent you from getting the coverage you need.