How Many Americans Have Life Insurance in the U.S: Key Statistics
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Open Access
Life insurance ownership in the U.S. rose to 52% in 2023, up from 50% in 2022. However, 21% of policyholders feel they don’t have enough coverage.
This article explores life insurance information, including its prevalence, coverage gaps, and the latest statistics.
Key Insights
51% of Americans own at least one life insurance policy.
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Men are more likely to have life insurance than women, with an 11-point gap persisting for the past 14 years.
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The U.S. life insurance market was valued at $1.77 trillion in 2023 and is expected to grow to $4.37 trillion by 2033.
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The U.S. life insurance industry itself remains strong, with over 1,200 active life insurance companies.
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Despite rising interest in recent years, nearly 40% of Americans still don’t have life insurance.
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Trends and Statistics: How Many Americans Have Life Insurance
According to the 2024 Insurance Barometer Study, 51% of Americans own at least one life insurance policy. While coverage rates have remained steady, a significant 42% of American adults either lack insurance or need more coverage. That’s about 102 million people who are either uninsured or underinsured.
Many see life insurance as a way to cover burial and final expenses, with 23% of consumers limiting its purpose to that alone. But life insurance does more.
After the COVID-19 pandemic, people realized that it provides income replacement and wealth transfer, ensuring financial security for loved ones after a primary wage earner passes away.
Life Insurance Distribution Across Gender
Men are more likely to have life insurance than women, with an 11-point gap persisting for the past 14 years. Yet, the need for coverage is actually higher among women (45%) than men (39%).
Knowledge also plays a role. Only 22% of women feel informed about their life insurance, compared to 33% of men who consider themselves highly knowledgeable. This gap in awareness could be a key reason fewer women secure coverage, despite needing it more.
Types of Life Insurance in America
The U.S. life insurance market was valued at $1.77 trillion in 2023 and is expected to grow to $4.37 trillion by 2033, expanding at a 9.45% annual rate. Life insurance comes in different forms, each serving a unique financial purpose.
Here’s a breakdown of the most common types:
Term Life Insurance
This is the most affordable option, offering coverage for a set period, typically 10, 20, or 30 years. If the policyholder passes away during this term, beneficiaries receive the payout.
A key benefit of the term life insurance policy is locked-in premiums, making financial planning easier. In Q3 2024, new premiums for term life policies totaled $739 million, holding steady from the previous year.
Universal Life Insurance
A more flexible form of permanent life insurance, universal life offers lifelong coverage with adjustable premiums and death benefits. Policyholders can build cash value, which can be used later. In Q3 2024, fixed universal life insurance saw a 13% increase in new premiums, reaching $266 million.
Final Expense Life Insurance
Also known as burial insurance, this death benefit policy is designed to cover end-of-life expenses, such as funeral costs, medical bills, and outstanding debts. It provides a smaller, more affordable payout.
The U.S. final expense insurance market is growing, with projections rising from $158.4 billion in 2024 to $291.7 billion by 2033, reflecting a 7.02% annual growth rate.
Whole Life Insurance
Whole life policies provide lifelong coverage with a built-in cash value component that grows over time. Coverage amounts range from $1,000 to $500,000+, depending on factors like age and health.
In Q3 2024, whole life insurance premiums reached $1.4 billion, reflecting a 1% decline from the prior year.
Life Insurance Coverage in the U.S.
Many Americans with life insurance feel underinsured. According to LIMRA, 22% of policyholders believe they don’t have enough coverage. The concern is even higher among middle-income earners ($50,000 to $149,999 per year), where 39% say they need more protection.
Payouts from life insurance policies continue to rise. In 2023, total life insurance benefits and claims reached $831.9 billion, up from $812.5 billion in 2022.
This includes death benefits, annuities, and disability payouts, showing the financial impact life insurance has on families across the country.
The U.S. life insurance industry itself remains strong, with over 1,200 active life insurance companies offering various policies. However, the number of life insurance providers has been gradually decreasing, dropping to 719 in 2023, down from 727 the year before. Despite this, life insurance remains a key part of financial planning for millions of Americans.
Life Insurance Ownership Across Age Groups
Life insurance ownership tends to rise with age, as financial responsibilities and long-term planning become more important.
According to the 2024 Insurance Barometer Study, uninsured rates have dropped in 17 states for children, 42 states for working-age adults, and one state (Florida) for adults 65 and older since 2019.
Younger adults are showing a growing interest in life insurance, with 39% of Americans planning to buy a life insurance policy.
Here’s a breakdown of ownership by age group:
- Gen Z (18-26): 40%
- Millennials (27-42): 48%
- Gen X (43-58): 54%
- Baby Boomers (59-78+): 58%
Barriers to Life Insurance
Many Americans want life insurance but don’t follow through.
Here are some of the most common barriers:
- Financial Concerns: The top reason people skip life insurance is they believe the cost of life insurance is too high. However, almost half of Americans overestimate the cost by three times. In fact, 72% of Americans think a basic term life insurance policy costs more than it actually does.
- Lack of knowledge: Choosing the right policy can feel overwhelming. 36% of uninsured adults say they haven’t purchased coverage because they don’t know how much life insurance they need or which type to buy.
- Misunderstanding of Policy Benefits: Many see life insurance policies as just a way to cover funeral costs, but they offer much more. A policy can:
- Replace lost income for dependents
- Pay off debts like mortgages or loans
- Support a business after the policyholder’s passing.
Factors Influencing Life Insurance Coverage
Nearly 40% of Americans still don’t have life insurance, despite rising interest in recent years. Income plays a role—higher earners are more likely to have coverage, yet 15% of households making $100,000 or more have no life insurance coverage.
Beyond finances, several factors impact life insurance costs and accessibility.
- Health Status: Pre-existing conditions can significantly increase premiums. Insurers assess height, weight, blood pressure, cholesterol, and other vitals during the medical exam for underwriting. Non-smokers typically get lower rates than smokers due to health risks.
- Age: Premiums rise with age, typically by 8-10% per year. Younger applicants pay less due to longer life expectancy. The increase is about 5% annually in the 40s but can jump to 12% per year after age 50.
- Gender: Since women tend to live longer, they pay about 24% less for life insurance than men. Insurers price policies based on life expectancy, which gives women lower rates over a lifetime.
Bottom Line
Life insurance ownership in the U.S. reached 52% in 2023, rising from 50% in 2022, yet 21% of policyholders say they don’t have enough coverage. Middle-income earners are among the most affected, with 39% needing more protection.
The industry remains strong, with $831.9 billion in benefits and claims paid in 2023, but the number of life insurance providers has declined to 719. Costs, lack of knowledge, and misunderstandings about policy benefits continue to deter many Americans from securing adequate coverage.
With the U.S. life insurance market projected to grow from $1.77 trillion in 2023 to $4.37 trillion by 2033, demand is expected to increase, especially among younger generations. As 58% of Baby Boomers and 54% of Gen X hold policies, future trends suggest a shift in awareness and coverage gaps across age groups.
The rising costs of healthcare and living expenses highlight the importance of life insurance as a financial safety net. For many, securing the right policy could mean ensuring long-term financial stability for their loved ones.
FAQs
Direct premium insurance refers to the total premiums collected by an insurance company before accounting for any amounts transferred to reinsurers.
Health insurance provides financial protection by covering your medical costs in case of illness, injury, or hospitalization. It typically pays for doctor visits, hospital stays, medications, and preventive care.
New York Life is very safe. It holds the highest financial strength ratings that have been awarded to any U.S. life insurer from all four major credit rating agencies.
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