12 Life Insurance Statistics That Will Blow Your Mind
Life insurance is one of those things that people put off purchasing. After all, who wants to think about their own death?
According to the Insurance Information Institute, as of 2020, only 54% of the people in the United States have life insurance. There are about 41 million people in the U.S. who say they need life insurance but do not have coverage.
If these life insurance statistics surprise you, read on for more mind-blowing life insurance stats.
1. United States Is Largest Life Insurance Purchaser Worldwide
According to the National Association of Insurance Commissioners, the states with the largest number of people purchasing life insurance are New York, Texas, and California. Those three states purchase more insurance in aggregate dollars per state than the bottom 36 states combined.
California residents purchase more life insurance than 27 other states. The state with the lowest amount of life insurance is Wyoming. Overall, the United States purchases more life insurance than any other country.
2. There Are 841 Companies Selling Life Insurance
As of 2018, the United States has 841 companies selling life insurance. Of those 109 are considered “mutual insurance companies” that are owned by policyholders and policyholders receive dividends.
3. Life Insurance Began in 1759
In 1759 the first insurance company, the Presbyterian Minister’s Fund, began in the American Colonies. The company’s main focus was providing financial support to families of Presbyterian clergymen. The companies success is evident by the development of 17 stock life insurance companies in New York by 1820.
By 1910 insurance became a booming industry with an 8.4% growth rate between 1910 to 1990. This grew to 2,270 life insurance businesses by 1980.
4. 50% Of Americans Prefer to Research Life Insurance Online
About 50% of Americans in the market for life insurance prefer to do their research online. About 30% of Americans say that they feel comfortable doing website policy comparisons and purchasing insurance online. Generation X (1965 to 1980) is the generation most comfortable with the internet process.
5. 25-28% Of People Do Not Know the Value of Their Policy
About 70% of Americans believe that life insurance will offer them protection to live a long life that is financially secure. Despite that fact, 51% either have no life insurance or are not sure if they do.
Of those that know they have life insurance, 25% do not know the value of their policy. If they have a policy at work, 28% do not know the value of that policy.
Although it is important for spouses to know about the other’s life insurance coverage, 42% do not know the value of a spouse's workplace policy. They do better on personal policies, but 25% are still in the dark.
6. Life Insurance Provides Living Benefits
Many people do not realize that certain permanent or whole life insurance policies provide living benefits. These benefits are available in a variety of ways.
One method is to take out a loan against the policy’s cash value. You may also take out a special rider for chronic illness that will allow you to use part of the death benefit while still living. This coverage will provide assistance if you suffer from severe physical or cognitive impairment.
When young or in good health you may not consider this important fact, but we are living longer every day. As people grow older 25% worry about dying unexpectedly, 40% worry about receiving a diagnosis for a chronic illness, and 34% worry about running out of money.
7. 92% Of Americans Are Not Aware Of Permanent Life Insurance Benefits
The main focus of any life insurance policy is to pay a death benefit to the insured’s beneficiaries. However, 92% of Americans are unaware of all the benefits this type of policy provides, including:
- Ability to withdraw the cash value
- Saving for the future
- Ability to take out a loan against the cash value
- Building a tax-deferred supplemental retirement income
- Cash value grows tax-free
- Cash value grows at a guaranteed rate of return
Whole or permanent life insurance policies are more expensive than term life insurance policies, but the benefits make them valuable.
8. More Than the Breadwinner Needs Life Insurance
It is a huge misconception that only the person making money in a family needs insurance. Others believe that insurance is only necessary when you marry or have young children. The fact is, everyone needs life insurance.
Stay-at-Home parents need coverage to provide for the cost of daycare, housekeeping, and more in the event they were to suddenly die.
You need to maintain life insurance after your children turn 18. Your life insurance will provide your spouse money to help support themselves after your death. It will also provide funds to use for your funeral and burial.
Single young adults need life insurance to help their parents or other beneficiaries pay for their funeral and burial in the event of an untimely death.
9. Children Need Life Insurance
By purchasing life insurance for your child as soon after birth as possible, you are able to secure for them a low-cost premium on a permanent policy. By maintaining this policy throughout their life they have the coverage they need as an adult at a reasonable premium rate.
10. You Lose Coverage of Work Group Insurance
When you are working many employers offer you participation in their group life insurance plan. This is usually available for free or at a low cost. This is a great asset when you are working but will not fulfill your needs. This coverage ends when your employment does.
If you are relying on your work insurance, you are probably grossly underinsured. The rule of thumb for determining a death benefit is that it needs to be ten times your annual income. You will not be able to obtain employer life insurance at that level.
11. Many Regret Not Purchasing Life Insurance Earlier
It is easy to assume you do not need life insurance as a young adult and that there is plenty of time to purchase it in later years. That is a huge mistake because the younger you are the less expensive it is to purchase a policy. Almost four out of every ten owners of life insurance regret not buying their policies earlier.
12. Covid-19 Panic Buying
The number of Google searches for life insurance increased by 50% between March and May of 2020. During that period of time, the stay-at-home orders and little known knowledge about the pandemic causing deaths on a daily basis brought public awareness to the risk of unpredictable death.
The increase in life insurance policy sales, especially to young adults, can be attributed to the huge fear of death and the financial risks of mortality.
Life Insurance Statistics Inspiration
We hope these life insurance statistics have inspired you to take the plunge and make that purchase. Here at LifePlans.com, our mission is to offer life insurance help in the way of a 100% free and super-fast quote.
Our online life insurance marketplace provides you with price comparisons from several life insurance providers. With the use of our technology, we are able to find you the best life insurance company at cost savings. The process is simple, just give us your zip code, your coverage needs, and we provide a custom quote comparison.
Because we do not sell insurance we are able to provide you with an honest, unbiased quote comparison on the best insurance for you and your family. Get a life insurance quote today!