Life Insurance Facts & Statistics

Life insurance is an important financial product that provides peace of mind and financial security to individuals and their families. It helps cover unexpected expenses and provides financial support in the event of a policyholder’s death. With a range of policies available, it’s important to understand the trends and benefits of life insurance.

In this article, we’ll provide a comprehensive analysis of life insurance statistics, including the benefits of life insurance, the different types of policies available, and the latest trends in the life insurance industry.

The Benefits of Life Insurance

Life insurance provides financial support to policyholders’ beneficiaries in the event of their death. This support can be used to cover various expenses, such as funeral costs, outstanding debts, and living expenses. Life insurance policies also offer tax benefits, making it a smart investment for individuals looking to secure their financial future.

According to a study by LIMRA, a research and consulting firm for the insurance industry, 54% of Americans have life insurance coverage. However, many individuals are underinsured or lack the proper coverage to fully protect their families. The study found that 30% of households in the U.S. have no life insurance coverage, and 48% of households with children under the age of 18 have less coverage than recommended.

Different Types of Life Insurance Policies

There are two main types of life insurance policies: term life insurance and permanent life insurance.

Term life insurance provides coverage for a specific period, typically ranging from one to 30 years. It’s the most affordable type of life insurance and is designed to provide financial protection during a specific period, such as the policyholder’s working years or the length of a mortgage. Term life insurance policies do not have a cash value component and only pay out a death benefit if the policyholder dies during the coverage period.

Permanent life insurance provides coverage for the policyholder’s entire life and includes a cash value component. The two main types of permanent life insurance are whole life insurance and universal life insurance. Whole life insurance provides a guaranteed death benefit and a fixed premium, while universal life insurance offers more flexibility with premium payments and death benefit amounts.

According to a report by the National Association of Insurance Commissioners (NAIC), the majority of life insurance policies purchased in 2020 were term life insurance policies. However, the report also found that the percentage of policies sold as permanent life insurance increased in 2020 compared to the previous year.

Trends in the Life Insurance Industry

The life insurance industry is constantly evolving, with new products and services being introduced to meet the changing needs of consumers. One of the latest trends in the industry is the use of technology to streamline the life insurance application process. Many insurers now offer online applications and underwriting, making it easier and more convenient for consumers to purchase life insurance.

Another trend in the industry is the increasing popularity of living benefits riders, which allow policyholders to access their death benefit while they’re still alive if they are diagnosed with a terminal illness or critical illness. According to a report by the Society of Actuaries, the number of life insurance policies sold with living benefits riders increased by 78% from 2015 to 2019.

Life Insurance Statistics and Trends

Life insurance is an important financial product that provides financial protection to individuals and their families. Here are 35 statistics about life insurance that highlight its benefits, trends, and importance:

• According to a study by LIMRA, 54% of Americans have life insurance coverage.
• The same study found that 30% of households in the U.S. have no life insurance coverage.
• 48% of households with children under the age of 18 have less coverage than recommended, according to the same study by LIMRA.
• The average life insurance coverage amount for Americans is $250,000, according to a study by Policygenius.
• 70% of Americans say that they would have trouble paying living expenses if the primary breadwinner in their household died, according to a study by Bankrate.
• Life insurance policies provide tax benefits to policyholders, making it a smart investment for individuals looking to secure their financial future.
• According to a report by the National Association of Insurance Commissioners (NAIC), the majority of life insurance policies purchased in 2020 were term life insurance policies.
• The same report found that the percentage of policies sold as permanent life insurance increased in 2020 compared to the previous year.
• Term life insurance policies are the most affordable type of life insurance.
• Permanent life insurance policies provide coverage for the policyholder’s entire life and include a cash value component.
• Whole life insurance provides a guaranteed death benefit and a fixed premium.
• Universal life insurance offers more flexibility with premium payments and death benefit amounts.
• According to a study by J.D. Power, consumers who purchase life insurance online are more satisfied with their experience than those who purchase in-person.
• The life insurance industry is expected to grow at a compound annual growth rate of 3.5% from 2021 to 2028, according to a report by Allied Market Research.
• In 2020, the global life insurance market was valued at $2.4 trillion, according to the same report by Allied Market Research.
• According to a report by the Society of Actuaries, the number of life insurance policies sold with living benefits riders increased by 78% from 2015 to 2019.
• Living benefits riders allow policyholders to access their death benefit while they’re still alive if they are diagnosed with a terminal illness or critical illness.
• The average annual cost of a term life insurance policy is $572, according to a study by Policygenius.
• The same study found that the average annual cost of a whole life insurance policy is $2,346.
• The life expectancy in the U.S. is 76 years for men and 81 years for women, according to the Centers for Disease Control and Prevention (CDC).
• According to the same report by the CDC, heart disease and cancer are the two leading causes of death in the U.S.
• The COVID-19 pandemic has increased awareness of the importance of life insurance, with many individuals purchasing policies to protect their families.
• In 2020, life insurance application activity increased by 4.6%, according to a report by MIB Group.
• The same report found that application activity for individuals under the age of 45 increased by 7.1%.
• The COVID-19 pandemic has also led to an increase in the use of technology to streamline the life insurance application process.
• Many insurers now offer online applications and underwriting, making it easier and more convenient for consumers to purchase life insurance.
• The life insurance industry is highly regulated, with each state having its own insurance department to oversee the industry.
• The National Association of Insurance Commissioners (NAIC) is a regulatory body that oversees the insurance industry in the U.S.
• According to a study by LIMRA, 59% of Americans who have life insurance coverage purchased it through their employer.
• Group life insurance policies offered by employers typically provide coverage up to a certain amount, such as one or two times the employee’s salary.
• According to a report by the Insurance Information Institute, life insurance policies are typically not subject to federal income tax.
• The same report notes that life insurance policies may be subject to estate tax if the policyholder’s estate exceeds a certain amount.
• Many life insurance policies require a medical exam as part of the underwriting process to determine the policyholder’s health status.
• Some insurers offer no-exam life insurance policies, which allow individuals to apply for coverage without undergoing a medical exam.
• Life insurance policies can provide peace of mind and financial security to individuals and their families, making it a smart investment for individuals looking to secure their financial future.

Life insurance is an essential financial product that provides peace of mind and financial security to individuals and their families. Understanding the benefits and trends of life insurance can help individuals make informed decisions when choosing a policy. Term life insurance and permanent life insurance are the two main types of policies available, and the industry is evolving with the use of technology and the introduction of new products and services. By staying informed and choosing the right policy, individuals can ensure that their loved ones are protected financially in the event of their death.