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Vanessa Hamilton

Updated at 2021-04-29 18:43:55 UTC

Life insurance

  • Within any industry, data helps us to understand the big picture.

  • Life insurance statistics help us tell the story of:

  • the progress for the life insurance industry as a whole
  • the growth of well-known life insurance companies, as well as new entrants
  • the consumers who are (or aren’t) purchasing life insurance products

Below you’ll find a comprehensive data set for each of these categories, as well as the primary figures we have found to be most important to every group.

Top Life Insurance Statistics

  1. In 2020, 54% of Americans are insured, down from 57% in 2019, with 1 in 3 families remaining uninsured.
  2. 66% of Americans, or 2 in 3 individuals, buy life insurance to transfer wealth to other generations.
  3. 44% of Millennials overestimate the cost of term life insurance by 5x.
  4. In 2018, 28% of Millennials said they would buy life insurance online. Today, 29% of all consumers say they would.
  5. There are approximately 267 million life insurance policies in place in the United States.
  6. 80% of consumers say buying life insurance is a relevant financial planning topic for their household.

We’re going to look at five main focal points within these four sections:

Total Market Penetration

Starting at the top and looking at the industry as a whole, one statistic stands out among the rest:

The total percentage of market penetration for the life insurance industry is relatively stable at 54%, though it is has been trending downward over the past decade.

Since 2011, here’s the percentage of the adult population who has held a life insurance policy in each year:

YEAR
PERCENTAGE
2011
63%
2012
59%
2013
62%
2014
57%
2015
57%
2016
60%
2017
59%
2018
59%
2019
57%
2020
54%

Additionally, here’s the ownership gap in those same years, which shows a leap from 2019:

YEAR
PERCENTAGE
2011
7%
2012
6%
2013
3%
2014
6%
2015
10%
2016
10%
2017
11%
2018
9%
2019
9%
2020
16%

Something to note here is the relatively small ownership gap for the life insurance sector (when compared to other lines of insurance).

The ownership gap percentage is essentially the difference between how many people say they ought to own a life insurance policy and those who actually do.

This, therefore, suggests the industry is performing quite well and the vast majority of all consumers who feel they need coverage are making a purchase.

Life Insurance Company Market Share

Market share data is the leading indicator of how well life insurance companies are doing, showing which ones are performing best.

A life insurance company’s market share shows not only how well it is doing throughout the industry, but also comparative to its closest competitors.

Here is the most recent data published in March of 2020:

$174,072,717,982

Based on an industry total of direct written premiums equaling $174,072,717,982, the top 25 life insurance companies wrote close to 2/3rds of all premiums, with more than 50% of the total coming from just the top 12 insurers.

COMPANY NAME
DIRECT PREMIUMS
MARKET SHARE (%)
COMPETITOR GAP
Northwestern Mut Grp
$11,278,801,822
6.48%
 
New York Life Grp
$11,053,776,227
6.35%
-0.13%
Metropolitan Grp
$10,767,180,668
6.19%
-0.16%
Lincoln Natl Grp
$9,651,117,072
5.54%
-0.65%
Prudential of Amer Grp
$9,642,360,389
5.54%
-0.00%
Mass Mut Life Ins Grp
$7,984,470,423
4.59%
-0.95%
Aegon US Holding Grp
$4,868,457,551
2.80%
-1.79%
John Hancock Grp
$4,817,849,577
2.77%
-0.03%
State Farm Grp
$4,797,872,970
2.76%
-0.01%
Minnesota Mut Grp
$4,724,702,591
2.71%
-0.05%
Guardian Life Grp
$4,172,505,702
2.40%
-0.31%
Pacific Life Grp
$3,874,562,954
2.23%
-0.17%
American Intl Grp
$3,535,531,563
2.03%
-0.20%
Nationwide Corp Grp
$3,331,942,644
1.91%
-0.12%
Equitable Holdings Inc Grp
$3,099,092,783
1.78%
-0.13%
Voya Financial Grp
$2,646,846,575
1.52%
-0.26%
Mutual of Omaha Grp
$2,502,613,964
1.44%
-0.08%
Globe Life Inc Grp
$2,477,964,583
1.42%
-0.02%
Primerica Grp
$2,456,562,333
1.41%
-0.01%
Dai-Ichi Life Holdings Inc Grp
$2,450,639,110
1.41%
-0.00%
Unum Grp
$2,403,439,950
1.38%
-0.03%
Brighthouse Holdings Grp
$2,385,778,456
1.37%
-0.01%
Principal Grp
$2,236,083,923
1.28%
-0.09%
Sammons Enterprises Grp
$2,189,822,354
1.26%
-0.02%
Penn Mut Grp
$2,012,621,117
1.16%
-0.10%
Total
$174,072,717,982
64.19%
 

Table amounts in $thousands.

Among the top 5 alone, nearly 30% of the market share is already taken, and they more than double some of their closest competitors annually.

This speaks largely to how long some of these insurance companies have been in the market (some over 150 years), but also in their marketability. Many of those with large market share are very well known brands.

What Consumers Want Most

In order for the life insurance industry to continually close the ownership gap, it must first focus on what consumers want most out of their policies, and what they are most likely to purchase.

There are two main focal points here, neither of which is more important than the other.

First:

50% of all people searching for life insurance tend to value convenience, speed, and simplicity in underwriting over all other factors.

Simplified underwriting means there tend to be fewer requirements and/or a faster approval time than a fully underwritten policy; the trade-off tends to be marginally higher prices.

Several new companies have come to market with what have been coined as “no exam life insurance policies,” which allow consumers to buy a policy with no physical exam or blood work, and computer-automated approval systems.

Aside from what consumers do, want, let’s take a glance at what they definitely don’twant:

Virtually no one cares to explore a life insurance purchase through social media, though they may use it for validation purposes when finding or switching financial advisors.

This shouldn’t come as a shock to anyone.

Social media interruptions from insurance companies and agents promoting products are akin to telemarketing calls of old at dinner time.

Most consumers are on social media to be entertained, not to be sold insurance.

However…

A growing number of people use Facebook (26%), Instagram (11%), Twitter (9%), LinkedIn (9%), and even YouTube (17%) to verify the validity of an insurer, website, financial advisor, or life insurance agent before doing business with them.

This leads to the final focal point.

Industry Trust & Sentiment Markers

Perhaps the greatest measure for the likelihood of a life insurance policy going in force is trust.

A person who trusts their agent or advisor and the company they are placing their business with are the most likely to buy life insurance.

However, trust alone is not going to move the average person to get a life insurance policy; a consumer feeling the need for coverage has to be present.

And, unfortunately:

Replacing lost income, funeral costs, or final expenses, and leaving money to heirs are the three least cited financial concerns among consumers this year.

In other words, life insurance is by far the least of a consumer’s thoughts when compared to retirement, monthly bills, or paying for healthcare.

Here’s how it all stacks up:

Financial Concern
Level
Retirement
24%
Long Term Care
11%
Investment Loss
10%
Revolving Bills
10%
Disability
8%
Credit Card Debts
7%
Healthcare
7%
Emergencies
6%
Housing
5%
Education
5%
Income Replacement
4%
Funeral Costs
3%
Inheritances
2%

While most people are feeling better about their finances than ever before, at least since the most recent recession, life insurance is still the bottom of the barrel.

This leaves us with the idea that life insurance is still an emotional purchase, by and large. Many people don’t feel obligated to own life insurance until it “hits home” with a family member, friend, or someone close.

And, when they do shop, many get lost along the way.

It’s estimated 1 million fewer households will buy life insurance in 2019 when compared to 2017.

Not only are fewer people starting their journey for coverage, but a lower percentage are completing the task they originally set out to do:

 
2017
2019
Difference
Search
15%
13%
-2%
Quote
11%
10%
-1%
Buy
9%
6%
-3%

The data shows the number of households beginning the process of buying life insurance decreasing from 19 million households down to 17 million.

Similarly, the number who commit enough personally identifiable information to get quotes dropped from 14 million to 13 million.

Finally, the number of households who eventually ended their search with a purchase fell from 9 million to 8 million.

Overall, while consumers are more savvy in their purchase than ever, fewer are making it a priority.


Industry-Wide Life Insurance Statistics

At the most macro level, there are quite a few statistics which encapsulate what is currently happening with the life insurance industry as a whole.

The data points may reflect one segment, but they are representative of performance for the industry as they work congruently.

Life & Health Insurance Companies Breakdown

Life and health insurance companies activities can be broken down by percentages of what type of business they pursue, and it looks like this:

Annuities
46%
Accident/Health
28%
Life
26%
Financial Services
<1%

Life Insurance Sold By State

In 2017, it was reported that California had the largest amount of life insurance value purchased, at $452.38 billion, while Wyoming had the least at just $5.1 billion.


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