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Life Insurance Trends and Statistics

July 15, 2015

Life Insurance Trends and StatisticsEvery year, industry professionals look to the facts for the latest trends in life insurance ownership. Take a look at the most recent report from LIMRA, a financial consulting and research firm. They publish their “Facts of Life” survey, a thorough statistical analysis of the insurance industry, on a yearly basis. You may be surprised by these life insurance statistics.

Fewer Americans Have Life Insurance

Overall, life insurance ownership remains fairly low in most of the US. Fewer than half of middle market consumers from ages 25 to 64 have individual life insurance coverage. However, forty-four percent of those without life insurance coverage admit that they need it, and 3 in 10 people think that they might buy it next year.

As to why so few Americans have life insurance policies, the reason mostly boils down to (perception of) cost. Sixty-three percent of consumers were cited saying that life insurance is “too expensive.” Most consumers are more focused on saving for retirement. More than fifty percent say that the rising cost of living expenses such as Internet, cable, and phone bills are preventing them from buying life insurance.

Why People Buy Life Insurance

New reports from LIMRA are also shedding some light on why people decide to buy life insurance. Four in ten are prompted to start shopping for life insurance due to major life events such as getting married or divorced, having a child, buying a home or losing a member of the family.

Life Insurance by Ethnicity

Things get more interesting when we start to look at life insurance trends based on ethnicity. Although the Hispanic population is the fastest growing in the country, they still have a lower rate of life insurance ownership compared to other ethnicities. Hispanics come in at fifty-nine percent, while Whites have an ownership rate of sixty-two percent and African Americans have a rate of sixty-six percent. Members of the Hispanic population are more concerned with other financial burdens that keep them from buying life insurance. Sixty-six percent say that they opt to pay for medical expenses instead, fifty-seven percent say that are more concerned with paying off credit card debt, and thirty-nine percent are focused on paying for a child’s education or college.

LIMRA also reported on why Hispanics tend to purchase life insurance in the first place. As the most popular reason, eighty-nine percent cited burial and other end-of-life expenses as their top reason for buying life insurance. Sixty-nine percent said they purchase it to replace the lost income of a wage earner in the family. Sixty-seven percent said that they wanted to transfer wealth and leave an inheritance to their family. Fifty-seven percent said that they aim to pay off a mortgage with their life insurance policy. And finally, fifty-four percent say that they want to cover living expenses for their family including cooking, cleaning and transportation.

While this information can be beneficial for tracking the latest trends in life insurance ownership, it only represents a generality within the American public. Individuals and their needs vary case by case.

LIMRA uses their information to help insurance companies improve their marketing abilities and to target certain audiences. At LifeInsure.com, the ethnicity of all of our customers remains confidential. Whether it’s by phone, email or online, at no point are our customers asked to provide information on their ethnicity when they apply for a policy. I hope you found this information helpful. Check back for more updates and trends in the insurance industry in the months ahead.