What Percentage of People Have Life Insurance?

In the United States, insurance is a trillion-dollar industry, with life insurance accounting for close to half of the industry’s net premiums. Despite this, only 52% of American adults report having life insurance, according to a 2022 Insurance Barometer Study conducted by LIMRA and Life Happens, two nonprofit industry-funded groups. What’s more, 41% of adults – insured or not — feel their coverage falls short.

Even more alarming, fewer than half of people lacking life insurance say they feel financially secure, while 8 out of 10 overestimate the expense of a life insurance policy. So what’s driving this disconnect? In this article, we’ll break down the statistics that shape life insurance, and shed some light on this issue.

Other life insurance stats

When it comes to life insurance, the numbers reveal some interesting insights. Understanding the percentage of Americans who have life insurance, and from where, can help you make informed decisions about your own insurance.

For example, 22% of American women don’t have life insurance, compared to 11% of American men. In fact, life insurance ownership by women has declined overall for the past five years. One reason may be a sudden job loss, as 36% of women cited unexpected termination for losing their employer-based insurance.

But women face multiple barriers in getting adequate life insurance. What are some other reasons behind the life insurance gender gap?

  • First, lower average earnings ($46,488 compared to men’s $55,744) mean women often have less coverage, sometimes nearly $1 million less using common 10x income guidelines. 
  • Second, the value of unpaid labor from stay-at-home or part-time working moms—estimated at $178,201 annually—is rarely accounted for in coverage. 
  • Third, workplace life insurance often only covers the breadwinner, leaving the family under-insured. For this reason, employer-provided life insurance can skew the picture. 
  • Lastly, many women lack financial literacy, which could deter them from getting the coverage they need. They generally score lower on financial literacy tests, with only 48% of questions answered correctly.

Age also plays a big role. While one might expect older Americans to be more insured, the opposite is true: 64% of those 58 and older are without life insurance. In contrast, just 9% of young adults aged 18 to 25 are without coverage. That’s a pretty significant disparity, especially considering people are living longer and in better health.

As for the types of individual life insurance people have, there’s been a decline in both term and cash value life insurance since 1998. Term life insurance policies are down to 48% in 2019 from 52% in 1998. That said, those who opt for term life are choosing higher face values — the median value has nearly doubled from $60,000 to $110,000.

By contrast, cash value life insurance has seen a more pronounced drop, from 30% in 1998 to 20% in 2019. But even here, the median face value has increased, albeit modestly, from $45,000 to $50,000.

There is good news, however. Nearly 50% of women who are either underinsured or uninsured believe they require additional life insurance coverage; roughly one-third intend to purchase life insurance in the upcoming year. Furthermore, financial security jumps to 78% for consumers who hold both employer-sponsored and individual life insurance policies, according to the Insurance Information Institute.

Your life insurance stats

It’s never too late to make sure your insurance policy provides the coverage you need. To that end, an Independent Policy Review can be a game-changer, offering insights specific to you, your life insurance policy, and your financial situation. At Stratus Financial Partners, a California Licensed Life and Disability Analyst, we’re committed to guiding you through your life insurance options to make sure your coverage aligns with your current needs. Trust us to give your insurance portfolio the check-up it deserves.

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