Life Insurance Statistics

The Life Insurance industry and the insurance industry, in general, is a complex and confusing industry that leaves consumers needing more clarity. This article aims to clarify confusion about the life insurance industry by using life insurance statistics to demonstrate what is true and not true in the life insurance industry.

• Total revenue in the life insurance industry rose 3.2% to $478.8 billion in sales within the first six months of 2022, up from the prior year. If the trend continues, the total revenue for the life insurance industry will rise from $945.7 billion in 2021 to $957.8 billion in 2022, an 1.23% increase from the year prior.

• The revenue increase is largely driven by a 5.3% increase in net investment income and a 16.91% increase in other life insurers’ income.

• The average net profit margin as of Q2 2022 in the life insurance industry is 20.13%, up from 10.62% in Q1 2022. 

• According to Quotacy, the average cost of life insurance is $26 a month as of November 2022. 

• According to the 2022 Insurance Barometer Study, 106 million American adults will be without life insurance in 2022. 

• 50% of Americans will have life insurance in 2022, down from 52% of Americans who had life insurance in 2021. 

• 55% of Americans would experience financial hardship within a year or less if the household’s primary wage earner passed away due to an accident.

• 99% of people who buy life insurance from life insurers never collect a payout because they allow their coverage of life insurance to lapse before their death.

• Most Americans, 50% or more, overestimate the cost of coverage for life insurance by 300%.

• Americans with life insurance (68%) feel more secure than Americans without life insurance (47%).

• According to the Forbes Advisor Survey, 75% of American adults have life insurance from insurers.

• Women are twice as likely as men to lack coverage of life insurance from insurers.

• 60% of Forbes Advisor Survey respondents are worried about applying for life insurance since they use marijuana.

• Black respondents (22%) are nearly three times as likely than white people to view life insurance as a vehicle for passing down generational wealth and assets.

The average cost of disability insurance for life is between 1 percent and 4 percent of your annual income.

Life Insurance Premiums Written in 2022

Within the first six months of 2022, there has been $478.8 billion of life insurance premiums written by companies, up 3.2% from the prior year. The revenue increase for companies is largely driven by a 5.3% increase in net investment income and a 16.91% increase in other written income.

Who Controls Most of the Life Insurance Market?

• New York Life has the largest market share of companies offering life insurance in the United States of America. New York Life controls 6.5% of the annuity market share in the United States of America’s life insurance industry. In 2021 New York Life reported a surplus of $30.7 billion in annuity revenue and assets added. 

• Northwestern Mutual is the most popular life insurance company in the United States of America, with the largest annuity market share in 29 states and a market share total of 6.52%. 

• Following these two companies are Metlife (6.05%), Prudential (6.05%), Lincoln Financial (4.83%), MassMutual (4.57%), State Farm (2.87%), Aegon Life (2.8%), John Hancock (2.73%), Securian (2.7%), and then 54.13% is a number of other companies.

Percentage of Life Insurance Policies That Payout

99% of term life insurance policies do not payout because most people allow their life insurance coverage to lapse before death. Which brings the question up, is buying life insurance even worth it? To put it into perspective, if you purchase life insurance coverage of $250,000 at a 20-year term life insurance policy. Over the next 20 years of your term life insurance policy, your life insurance policy will lose 56% of its value due to inflation.

Most people allow their life insurance to lapse not because they are careless and forgetful. Most people allow their life insurance to lapse because it becomes too expensive for them as they age to afford to continue to pay for life insurance. If Pamela Yellen wanted to continue to pay for life insurance at the age of 68, she would have to pay a premium 15 times higher than she is now. Ten years later, that premium will be 40 times higher, nearly a 4,000% increase. Does that make one wonder if buying life insurance is even worth it?

What Percentage of US Population Has Life Insurance?

According to the LIMRA survey, 52% of Americans have life insurance, including individual life insurance and workplace life insurance. 

Who is Most Likely to Buy Life Insurance?

Life insurance is believed to be only purchased by adults when the reality is that several age groups purchase life insurance from life insurance companies. Young adults between 18 to 34 years old are the most likely to buy life insurance policies. This is believed to be because young adults are starting families and want life insurance policies to ensure their loved ones are taken care of financially in case they die young. Middle-aged adults are the second most likely age group to acquire life insurance policies. 

Statistics About Term Life Insurance

When it comes to term life insurance statistics, there is a lot to know…

• The Millennial and Gen X generations are most likely to own term life insurance in comparison to the young generations.
• There is an assumption that if you have a term insurance policy for life, you cannot convert it to a permanent or whole-life policy. You can convert your term insurance policy for life depending on the insurance policy you purchased. Make sure you find out the details of your term insurance policy for life before purchasing insurance from your agent and life insurance companies. Only some term insurance policies for life allow you to convert the insurance policy to another life insurance policy. Check with different life insurance companies to see if you can convert your coverage.

• Most consumers overestimate the cost of a term insurance policy for life. Life insurance can be very affordable depending on the type of life insurance and the amount of life insurance coverage you need. 

Life insurance policies for a term are decreasing rapidly year over year. Only 48% of Americans owned a term insurance policy for life in 2019, down from 52% in 1998. However, the average value of a life insurance policy for a term rose from $110,000 to $60,000 during the same period. 

Here is the average cost of life insurance statistics broken up by age for term insurance policy statistics:

• Age 25 for a nonsmoker life insurance for a term insurance policy costs $31 a month.

• Age 25 for a smoker, life insurance for a term insurance policy costs $86 a month.

• Age 30 for a nonsmoker life insurance for a term insurance policy costs $33 a month.

• Age 30 for a smoker’s life insurance term policy costs $92 a month.

• Age 35 for a nonsmoker life insurance term insurance policy costs $38 a month.

• Age 35 for a smoker’s life insurance term policy costs $117 a month.

• Age 40 for a nonsmoker life insurance term insurance policy costs $50 a month.

• Age 40 for a smoker life insurance term insurance policy costs $179 a month.

• Coverage at age 45 for a nonsmoker costs $78 a month.

• Coverage at age 45 for a smoker costs $277 a month.

• Coverage at age 50 for a nonsmoker costs $118 a month.

• Coverage at age 50 for a smoker costs $426 a month.

• Coverage at age 55 for a nonsmoker costs $190 a month.

• Coverage at age 55 for a smoker costs $663 a month.

• Coverage at age 60 for a nonsmoker costs $318 a month.

• Coverage at age 60 for a smoker costs $1,007 a month.

• Coverage at age 65 for a nonsmoker costs $593 a month.?

• Coverage at age 65 for a smoker costs $1,528 a month.

The rates above are based on a 20-year policy with a $500,000 annuity.

Statistics About Individual Life Insurance

Here are the statistics:

• According to the Insurance Information Institute, feelings of security rise to 78% when consumers have employer-based and individual life insurance policies.

• 17% of Americans, or nearly one in five, have neither employer-based insurance nor individual life insurance premiums. 

• Lapse rates of all individual life insurance policies tend to be highest around the first and second year of the life insurance premiums, which affects about 8% of life insurance policies. 

• Individual insurance agents control about 50% of the individual life insurance premiums industry.

The top 10 Life Insurance Companies That Write Individual Life Insurance by Direct Premiums in 2021 is

1. Northwestern Mutual Life Insurance Company directly wrote $14,260,711 in life insurance and controls 9.5% of the individual life insurance market.
   
2. Massachusetts Mutual Life Insurance Company wrote $9,936,212 in direct premiums written for individual life insurance and controls 6.7% of the individual insurance market.
3. New York Life Insurance Group directly wrote $9,621,008 in individual life insurance and controls 6.4% of the individual insurance market.
4. Prudential Financial Life Insurance Inc. wrote $6,988,848 in individual life insurance and controls 4.7% of the individual insurance market.
5. Lincoln National Life Insurance Corp. wrote $6,864,630 in individual life insurance and controls 4.6% of the individual insurance market.
6. State Farm Life Insurance wrote $5,205,467 in individual life insurance and controls 3.5% of the individual insurance market.
7. John Hancock Life Insurance Co. wrote $5,034,556 in individual life insurance and controls 3.4% of the individual insurance market.
8. Transamerica Life Insurance wrote $4,678,536 in individual life insurance and controls 3.1% of the individual insurance market.
9. Pacific Life Insurance wrote $4,533,684 in individual life insurance and controls 3% of the individual insurance market.
10. Sammons Enterprises Life Insurance Inc. wrote $4,313,349 in individual life insurance and controls 2.9% of the individual insurance market.