16 Life Insurance Statistics & Facts For 2022
Life insurance is a necessity for family and loved ones, but it is an often misunderstood topic. These misconceptions don’t reflect the actual role life insurance plays in the average American’s life. This article covers important informative statistics about life insurance policies, how they impact you, and how they impact the average American.
While it may seem like a daunting task, it doesn’t need to be. Transparency is essential for understanding life insurance policies, so this article will give you a greater understanding of this ever-changing industry and the statistics that affect them.
At Boonswang Law, we help beneficiaries receive the life insurance benefits they are owed. If you need a life insurance attorney, call us today at 1-855-534-5560.
1. WHAT PERCENTAGE OF LIFE INSURANCE POLICIES PAY OUT?
The majority of life insurance policies do pay out. In 2018, life insurance policies paid more than $290 billion in benefits. However, 99% of term policies never pay out. This could be due to life insurance policy holders letting their policies lapse or due to life insurance companies failing to pay the benefits owed. (Source: Entreprenuer.com)
2. WHAT PERCENTAGE OF CONSUMERS PURCHASE LIFE INSURANCE ONLINE?
29% of consumers purchase life insurance online. This is up 17% since 2011 and continues to increase in popularity. This increase is attributed to the Covid-19 pandemic and the lack of in-person options. (Source: LIMRA)
3. WHAT PERCENTAGE OF AMERICANS HAVE LIFE INSURANCE?
In the United States, 54% of people are covered with some type of life insurance. This means around one-half of the United States isn’t covered by life insurance, however. This 54% of Americans with life insurance predominantly includes people ages 35-45. (Source: LIMRA)
4. HOW MANY AMERICANS ARE UNDERINSURED BY THEIR LIFE INSURANCE POLICY?
50% of people in the United States are underinsured. This means that people have life insurance, but the plan isn’t enough to cover expenses in the event of a death. This means that 50% of people with life insurance will still struggle to pay off debts, funeral costs, etc., after the death of the insured. (Source: LIMRA)
5. HOW MANY LIFE INSURANCE COMPANIES ARE THERE IN 2021?
As of 2018, there are in the US. The four largest and most predominant life insurance companies include MetLife/Brighthouse Financial, Northwestern Mutual, New York Life, and Prudential. (Source: Statista)
6. WHAT IS THE AVERAGE COST OF LIFE INSURANCE PER YEAR?
The cost of life insurance depends primarily on age and gender. For example, a 25-year-old female will need to pay $18.59/month, while a 25-year-old male will pay $22.67/month. A 50-year-old female will pay around $60.68/month for life insurance, while a 60-year-old male will pay $81.23/month. (Source: Bankrate)
7. HOW MUCH IS THE LIFE INSURANCE INDUSTRY WORTH?
Net premiums for the US life insurance industry totaled $1.32 trillion in 2019. 48% of premiums are from property/casualty insurance companies, and 52% are from life/annuity insurance companies. (Source: LIMRA)
8. WHAT PERCENTAGE OF MILLENIALS HAVE LIFE INSURANCE
Only 52% of millennials own life insurance, even though 80% acknowledge they need it. This is because millennials typically overestimate life insurance costs and don’t realize the value of coverage while they’re young and healthy. (Source: LIMRA)
9. TOP REASONS FOR BUYING LIFE INSURANCE IN THE U.S
There are a few main reasons why Americans buy life insurance. In a 2020 report, 84% of Americans said they get life insurance for burial expenses, followed by 66% for wealth transfer, 62% for income replacement, 57% for supplement retirement home, and 50% for paying off their mortgage. (Source: LIMRA)
10. HOW MUCH DO LIFE INSURANCE RATES INCREASE EACH YEAR?
Life insurance premiums increase every year of age at around 8-10% on average. If you’re in your 40s it could increase as low as 5%, but if you’re in your 50s it could increase as high as 12%. (Source: Investopedia)
11. WHICH STATES SPEND THE MOST ON LIFE INSURANCE
The states that spend the most on life insurance are New York, California, and Texas. They spend around $71 billion, $62 billion, and $46 billion each year respectively. (Source: ThinkAdvisor)
12. WHO DOESN’T QUALIFY FOR LIFE INSURANCE?
You may not qualify for life insurance if you have serious physical or mental health issues. Dangerous habits or careers could also keep you from buying life insurance, such as skydiving or rock climbing. Life insurance companies will also look at your credit and criminal record to decide if you are eligible for life insurance.
13. WHAT ACCOUNTS FOR THE MOST DIRECT PREMIUMS?
Annuities account for 48% of direct premiums. This is followed by accident health insurance which accounts for 27% of direct premiums. (Source: LIMRA)
14. WHAT PERCENTAGE OF LIFE INSURANCE CLAIMS ARE RESCINDED?
Around 5,000 policies are rescinded every year. In 2017, life insurance companies withheld $372 million. By rescinding policies in the event of claims, the life insurance industry avoids paying out what they owe, which leaves many Americans without life insurance. (Source: Free Advice)
15. WHAT CAUSES OF DEATH DOES LIFE INSURANCE NOT COVER?
Term life insurance may not cover accidental demise, death by self-inflicted injuries or hazardous activities, intoxication, drug overdose, homicide, or natural calamity such as a tsunami.
16. WHAT HAPPENS IF YOUR LIFE INSURANCE DOESN’T PAY OUT?
If your life insurance doesn’t pay out, contact a life insurance attorney who can help you receive the benefits you’re owed. At Boonswang Law, we have won many large settlements and achieved successful resolutions that were among the largest sums ever awarded in PA and the U.S. at large. We have experience, innovative trial strategies, and cutting-edge courtroom technology that we can use to help you recover the money you deserve.