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Life insurance provides many American families with an important financial safety net. The life insurance industry is large, and while it may seem stodgy, it is ever-evolving. We looked at statistics that reveal the scope of this industry.
Whole life insurance policies generate the largest portion of premiums compared to other life insurance types, although whole life is experiencing its lowest market share since 2024.
Source: LIMRA. Percentages are based on premiums.
Sales of pre-need life insurance increased 8% in 2023 from the prior year, according to LIMRA, based on nine companies that reported sales results for three consecutive years.
Pre-need life insurance is typically purchased from a funeral home as a way to plan and pay for one’s own funeral. Most policies (57%) are paid with one lump-sum payment. In 2023, the average pre-need coverage amount purchased was $5,352 for single premium policies and $6,356 for multi-pay policies, according to LIMRA.
The majority of parents (59%) say they have life insurance.
The ACLI reports that 57% of people employed in private industry have access to life insurance through their employers.
There are an estimated 102 million uninsured and underinsured adults in the U.S. who say they need life insurance or more of it, according to LIMRA’s 2024 Insurance Barometer study. That’s about 42% of adults. Households that earn under $50,000 a year were most likely (56%) to say they need life insurance.
Women are less likely to have life insurance compared to men (46% vs. 57%), according to the Barometer study.
Corebridge Financial conducted a study in 2024 that asked about at the top reasons people don’t buy life insurance:
The top reasons for buying life, according to LIMRA’s 2023 Barometer study, are:
A Forbes Advisor consumer survey in 2023 found that many people worry about how their family would pay bills if they died.
Buying online is edging out in-person shopping as the preferred method of buying life insurance: 32% of consumers say they’d like to buy online, compared to 29% who said they want to buy in-person, according to 2023 LIMRA data. Nonetheless, LIMRA notes that the large majority of sales still involve at least one in-person meeting.
The median face value of in-force policies was $150,000 in 2022, according to the latest data available from the ACLI. That breaks down to median face values of $162,000 for those with term life insurance and $75,000 for those with cash value life insurance.
The average face amount of new policies purchased in 2023 was $206,000, according to ACLI tabulations of data from the National Association of Insurance Commissioners (NAIC).
Life insurance may be more affordable than you imagine, especially if you’re looking at term life insurance. Here’s a look at average life insurance costs for popular 20-year term life policies.
Life insurance shoppers often think of life insurance in two buckets: term life insurance and whole life insurance. There are significant differences between the two, shown below. Life insurance buyers should also be aware of universal life insurance, which can build cash value and is often cheaper than whole life.
Unfortunately, confusion can prevent people from buying the right life insurance. And people have plenty of confusion about life insurance. Only 29% of life insurance consumers say they “strongly agree” their insurance company makes complex policies simpler, according to a J.D. Power 2024 U.S. Individual Life Insurance Study. In the same study, 61% said their insurance agent or advisor explains things in terms they understand.
A Forbes Advisor survey conducted in 2023 further revealed confusion about basic life insurance information.
Which type of life insurance is generally cheaper?
Very few respondents to our survey were aware that term life insurance is generally the cheapest way to get coverage.
What do you think usually happens if you outlive a term life insurance policy?
Only 20% of survey respondents knew that a term life policy typically ends with no refund if you outlive the term.
Which of the following best describes a life insurance rider?
A mere 6% of people in our survey could pick the correct definition of life insurance rider.
Consumers are also confused about who can be a life insurance beneficiary, based on our survey. Anyone can be listed as a beneficiary on a policy but pets can’t be, as they are considered property.
Life insurance rates are fundamentally based on life expectancy. Insurers use information such as age, gender and health to determine an applicant’s individual life insurance quote.
Overall, here’s what to expert in terms of life span.
Source: U.S. Department of Health and Human Services’ National Center for Health Statistics, National Vital Statistics Reports, 2021
In our 2023 survey we found that many people aren’t aware that life insurance covers death from illness and old age. While a certain narrow policy type called accidental death and dismemberment insurance doesn’t cover death from illness or old age, the vast majority of life insurance policies cover any cause of death (generally excluding suicide within the first two years).
In 2023 7.3% of individual life insurance policies lapsed, according to the ACLI. Lapses are often due to people not paying premiums. And 1.2% of policies were surrendered, which typically means the policyholder decided to take the cash value from the policy and terminate it.
For policies where claims were paid out, payments to life insurance beneficiaries totaled $133,221,536,000 in 2023, according to the ACLI.
MetLife is the largest life insurance company based on total life insurance issued in 2023.
Source: ACLI
This online survey of 2,000 U.S. adults ages 25+ was commissioned by Forbes and conducted by market research company OnePoll, in accordance with the Market Research Society’s code of conduct. Data was collected from Aug. 9-11, 2023. The margin of error is +/- 2.2 points with 95% confidence. This survey was overseen by the OnePoll research team, which is a member of the MRS and has corporate membership with the American Association for Public Opinion Research (AAPOR).
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