We pulled the most current life insurance statistics to showcase the benefits of coverage, evolving consumer beliefs and trends, and a growing insurance industry.
Key Statistics:
- Men are more likely to be insured than women in America, at 58% and 47%, respectively.
- 102 million Americans are uninsured or underinsured.
- One quarter of Americans would suffer a financial hardship within one month of the unexpected death of a wage earner
- The value of all reported direct life insurance premiums in 2022 was $193.6 billion, about a 21% increase from 2021.
Explore the facts below to learn more about life insurance and what to expect in the coming years.
Topics Covered in this article
Statistics On Life Insurance At A Glance
No matter your walk of life in this country, it’s a good idea to cover your dependents or your loved ones by getting a life insurance policy. Many Americans don’t fully comprehend policy underwriting and might be hesitant to purchase a policy because of a lack of understanding. Worse, they might even be avoiding it altogether because of procrastination.
- Americans aged 58 to 76 were least likely to have life insurance, with 39% lacking coverage.
- Covering burial and final expenses is the #1 reason that Americans purchase life insurance, with 83% stating it’s important to them.
- 53% of women say “paying for burial expenses” is the top reason they have life insurance, compared to 44% of men.
- 30% of Americans think burial and final expenses are all that life insurance covers.
- 69% of Americans don’t believe they’re very knowledgeable about life insurance, meaning they’re less likely to have adequate coverage.
- Roughly 1 in 3 men (33%) and 1 in 4 women (24%) consider life insurance as a way to supplement retirement income.
- 39% of men feel they are very knowledgeable about life insurance, compared to just 22% of women.
- 60% of consumers believe that life insurance is too expensive, the top reason they don’t buy coverage.
- One quarter of Americans would suffer a financial hardship within one month of the unexpected death of a wage earner, while 40% only have a six-month runway.
- The number of policyholders who prefer digital channels over in-person interaction with their insurers rose from 38% to 54% because of the COVID-19 pandemic.
How Many People Have Life Insurance?
Several factors affect the decision to purchase life insurance coverage, like:
- Age: Younger and middle-aged Americans are more likely than older generations to own life insurance, likely because they’re thinking about or are starting families and reaching their prime earning years.
- Income level: Higher-income consumers and higher net-worth individuals may be more focused on asset protection and estate planning, making them more likely to buy life insurance.
- Employment: Many Americans have insurance through their employer. This number lowers as Americans get older and reach retirement age.
- Gender: Women are more likely to worry about familial well-being but less likely to purchase life insurance than men.
- Marital status: Married people are more likely to buy life insurance than single individuals, possibly due to the added responsibilities of marriage, like joint mortgages and finances, as well as children.
Age, however, is the biggest determinant of whether someone will purchase life insurance. As baby boomers continue to fill out the 60+ age demographic, more will depend on their retirement savings and other means of post-career income.
- 102 million Americans are uninsured or underinsured.
- Among Americans without life insurance, 59% understand that they need coverage.
- Less than 2 in 5 single Americans own life insurance compared to more than half of married people.
- Men are more likely to be insured than women in America, at 58% and 47%, respectively.
- 1 in 4 adults over 77+ do not have life insurance, compared to only 9% of adults between the ages of 18 to 25.
- 18% of Americans are covered by multiple life insurance policies.
- Women (22%) are more likely than men (11%) to report they have no life insurance coverage.
- 1 in 3 men have life insurance solely through their employer, compared to 19% of women.
- 45% of millennials say they’re more likely to buy life insurance due to the COVID-19 pandemic.
- 53% of Americans either haven’t purchased insurance or haven’t expanded coverage because they don’t know what type or how much they need.
- 2 in 3 (67%) consumers say they would be more loyal to insurers if premiums were lower.
US Life Insurance Industry Statistics
Life insurance is a sizable part of many Americans’ plans for their own future. The industry, too, has to look to the future to assess how changes in technology and the economy will affect its customers and holdings.
Life expectancy dropped in both 2020 and 2021, meaning policyholders aren’t living quite as long. This means that insurance companies could see a continued increase in payouts in the coming decades.
- Life & Health (L&H) benefits payments totaled $790.8 billion in 2021, a 6% year-over-year increase and a 14% increase from 2017 — despite declining in 2019 and 2020.
- Only one-third of consumers know that insurance brokers need accreditation.
- The L&H sector accounts for around 32% of all direct insurance premiums, including property, casualty, and health.
- The 10 largest L&H companies cumulatively share 55% of the market.
- While the market share of the top 25 L&H insurers dropped in 2021, the top 100 companies held a steady market share.
- The value of all reported direct life insurance premiums in 2022 was $193.6 billion, about a 21% increase from 2021.
- When accounting for accident and health, as well as annuity considerations and deposit-type contract funds, total reported premiums amount to $1.1 trillion in 2022, up from $818 million in 2021.
- MetLife has the largest share of direct premiums written, with $103.3 billion in 2020, or an 11.3% market share — about $40 billion more than any other company.
- In 2021, the L&H insurance sector held around $8.5 trillion in assets.
- Expenses in the L&H sector rose 6% overall from 2020 to 2021.
- Contract surrenders (policy cancellations) caused a 12% increase in related expenses from 2020 to 2021.
- To raise capital, insurance companies cumulatively offered $4.4 billion in public equity in 2021.
- For the first time, L&H net investment income surpassed $200 billion in 2021 after two consecutive years of decline.
Common Life Insurance Misunderstandings
Even though life insurance can help supplement retirement income, replace the income of a top wage earner, and create a sense of stability after a loved one passes away, many Americans don’t have it. Let’s break down a few common myths that deter people from getting the life insurance coverage they need.
1. The IRS will take taxes out of my life insurance benefit payout.
Even though 1 in 3 Americans believe this myth, death benefits from life insurance are not taxable. However, you will have to report and pay taxes on any related interest you receive.
2. Insurance is just too expensive for most family budgets.
80% of Americans overestimate the cost of insurance despite 60% listing cost as their top reason to avoid coverage.
3. Life insurance policies cost more than $1,000 annually.
This isn’t quite accurate, even though 44% of millennials think so. In reality, a policy for a healthy 30-year-old could cost around $160 annually.
4. Technology advancements will lead fewer people to rely on insurance.
As many as 64% of insurance customers say they’d adopt new technology in exchange for lower premiums, while 49% would do so for improved services.
5. Most insurance customers are technology-averse.
At least 56% of consumers store some of their personal data in the cloud.
6. Customers are more focused on privacy than premiums.
Nearly 9 in 10 consumers would comfortably share their personal information and lifestyle details to lower their premiums.
7. Almost half of all insurance claims aren’t paid out.
While consumers believe that around 60% of claims are successful, in reality, it’s more than 90%.
Compare Companies and See Your Options
If you’re not covered, it’s time to start thinking about end-of-life expenses and making sure that your loved ones don’t fall into financial turmoil after facing an unexpected bill. Learn more about final expenses and life insurance and compare coverage today so you can make a choice that protects your family and their finances in the event of an emergency.
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