Affordable Life Insurance Protection for Your Family

How Much Life Insurance Does The Average Person Have?

What Amount Of Life Insurance Does the Average Person Own? 

 

If you are considering the purchase of a life insurance policy, you may be curious as to how much life insurance to buy and what amount of coverage the average person buys.

 

Average Amount of Life Insurance Owned


According to the American Council of Life Insurers (A Trade Association that advocates on behalf of Member Organizations), the average size of a new individual life insurance policy purchased in 2020 was $183,780.


The average face amount of life insurance policies in the United States in 2020 was $183,780. Source: ACLI


The average face value of life insurance policies does vary from year to year, but there’s usually a steady increase over time. 


In fact, the average amount of life coverage per individual insured person has increased from $165,290 in 2010 to $183,780 in 2020. The number of individual policies purchased totaled 10.1 million in 2020. 



Term life insurance is one of the two basic types of life insurance policies most commonly purchased, along with permanent life insurance.


Term insurance accounted for 41 percent of all new life policies bought in 2020, which amounts to approximately 4.2 million policies.


Apparently, new insureds buy larger amounts of term life compared to permanent life policies, since term coverage amounted to 74 percent, or $1.4 trillion of the total life insurance coverage issued in 2020. Source: ACLI


The most popular type of term policy is "Level Term" which offers a fixed (level) premium for the duration (term) of your coverage. 


With Level Term insurance plans you select a policy term, and your premium never increases, and the amount of life insurance provided by your policy never decreases, throughout the life (term) of your policy.

 

Average Mortgage Loan Amount in U.S.A.

 

When you factor in the average new mortgage loan amount which is estimated to be about $411,400 in 2021, the average individual may appear to be under-insured. 

 

A single average life insurance policy doesn’t provide enough to cover the cost of paying off the outstanding balance on a new average home mortgage loan. Source: The Ascent

 

How Much Life Insurance To Buy


How Much Life Insurance Do I Need?

 

When deciding on the right amount of coverage to buy, you’ll want to take into consideration several important factors, including your annual income, debt, savings, monthly bills, and what goals you want your life insurance policy to accomplish – why are you buying a policy?

 

The most accurate approach to determining how much coverage to get is to use a life insurance needs calculator.

 

Cost of Life Insurance


How Much Does Life Insurance Cost?

 

The price you pay for life insurance is called the "Premium"

 

Your premium for a policy is based on several including the type and amount of life insurance you need.

 

Your premium is based on the rate the insurer applies to your coverage.

 

The "Rate" is the price you pay per $1,000 of life insurance.

 

The rate is based on several risk factors, including your age, gender, health, hobbies, occupation, tobacco use, driving record, and lifestyle, among other things.

 

Save on Life Insurance


How Can I Save Money On Life Insurance?

 

There are a few tips you can follow that may help you save some hard earned cash on your policy.

 

  • Buy Now – Rate for life insurance are bases in part on your age. The younger you are when you buy a policy, the lower your rate for coverage. 
  • Choose Term – Permanent life usually costs up to 5-10 times more than the same amount of term insurance. 
  • Compare Pricing – Premiums may vary by insurance carrier, which means you may save by comparing rates from multiple life insurers.
  • Quit Smoking – Insurance companies usually charge up to 3-5 times more on life insurance for smokers, compared to non-smokers because smoking can cause cancer, COPD, or emphysema, which decreases your life expectancy.
  • Lose Weight – If you are overweight or obese, you may save on life insurance by losing some weight since rates are based in part on your BMI (Body Mass Index).


Life Insurance Facts


Underinsured


30 million American households are underinsured.

Source: Nerdwallet


Life Insurance Ownership in America


54% of Americans have life insurance in 2021.

Source: Simply Insurance


Average Life Insurance Cost in America


The average annual premium of a life insurance policy in America is about $631. 


This pricing is based on several different variables including the type of policy you buy and the amount of coverage; as well as, the duration of your insurance. 


In addition, your premiums may vary quite a bit based on your gender, age, overall health status, tobacco use and lifestyle, among other things.

Source: Simply Insurance 

 

Life Insurance Quotes

 

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How Much Life Insurance Does The Average Person Have?

Average Cost of Term Life Insurance


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