Life Insurance Facts

Facts from LIMRA International for Life Insurance
Awareness Month, September, 2014

According to the industry research group LIMRA, 95 million adult Americans have no life insurance whatsoever.


Life Insurance is important to American families.

  • Almost three fourths of Americans agree that life insurance is the best way to protect against premature death of a primary wage earner.
  • Life insurance beat out all other sources of financial assets or income that Americans expect to use to help pay their bills and to maintain their lifestyle if the primary wage earner dies.


Millions of Americans have no life insurance coverage.

  • Thirty percent of U.S. households have no life insurance at all; only 44 percent have individual life insurance.
  • Fifty percent of U.S. households (58 million) say they need more life insurance.
  • The average amount of coverage for U.S. adults has declined to $167,000, which is down $30,000 from the average coverage in 2004.
  • While 4 in 10 households with children under 18 now include a mother who is either the sole or primary earner for her family yet, among women who have life insurance, their coverage is only 69 percent of the average coverage on men.


Many Americans recognize they are underinsured.

  • Consumers who believe they need life insurance, 86 percent haven't bought it because they think it is too expensive.


Reasons Consumers Shop for Life Insurance

  • Among the triggers to shop for life insurance, 41 percent of recent shoppers say major life events (marriage, children, buying a house, etc.) motivated them to shop for life insurance.
  • Among consumers who said they wanted to review their coverage or thought they might need more, half shopped for life insurance.
  • When life insurance is suggested (either by a financial professional or through advertising) 37 percent of people surveyed shopped for life insurance.


How Consumers Prefer to Shop for Life Insurance

  • While face-to-face is still the most preferred method for buying life insurance, 86 percent of consumers would use the Internet to research life insurance before purchasing. Only 16 percent of consumers would prefer to buy insurance completely online.
  • About 2 in 10 households say they prefer to buy life insurance through the workplace in the future.

    Top reasons given include:

    View it as an easy and convenient way to buy (33 percent)

    Believe it will cost less or be a better value (26 percent)

    Trust their employers (20 percent)

    Like the ability to have premiums deducted from their paychecks

  • Among households saying they are likely to buy life insurance in the next 12 months, 35 percent say the reason they have not yet bought more life insurance is because no one has approached them about it.


Looking Ahead

  • Only eight percent of consumers consider themselves very/extremely likely to purchase life insurance in the next year.
  • Emerging as a trend: Nearly 2 in 10 consumers are willing to purchase through retail outlets like warehouse clubs and superstores.
  • Over the next 20 years Hispanics are projected to grow three times more than any other ethnic group in the U.S. In terms of life insurance, nearly half of Hispanics surveyed said they are concerned about financial protection if they should die suddenly (compared with 37 percent of the general population citing this as a top concern).


Source: LIMRA International information from Facts About Life 2014.


Additional Life Insurance Facts


22.85% of deaths in 2002 were from people between the ages of 25 and 64. Source: U.S. Census Bureau 2002


The average size of new individual life policies purchased has decreased since its peak in 2008 to $163,000 in 2012 (Figure 7.2).

Of new individual life policies purchased in 2012, 36 percent, or 3.6 million, were term insurance, totaling $1.1 trillion, or 66 percent, of the individual life face amount issued (Table 7.2). The most popular form of term insurance is level term, which offers a fixed premium.

Source: American Council of Life Insurers


Half of US adults own life insurance, and roughly 25 million apply for a new policy each year. The Web has recently overtaken agents as the most commonly used channel among US life insurance researchers. Among those who research their policy, two-fifths look for information online, while another two-fifths visit an agent, but just 3% do both.

Online comparison sites are playing an important role: 15% of recent life insurance buyers used one. When it comes to quoting and applying, however, in-person visits with agents remain Americans' preferred channel. Age, online experience, and the perceived security of the Web all affect consumers' channel preferences.

Source: Forrest Research 2010


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