Life insurance is a valuable part of an overall financial portfolio, but a significant number of Americans do not feel like they have adequate coverage. That’s just one of the realities characterizing current insurance market dynamics in the United States. Understanding the insurance market is important whether you already have a policy or have just begun shopping for one.
The annual Insurance Barometer Study, produced in collaboration by LIMRA and Life Happens, provides a glimpse of the insurance market landscape. This detailed study, which is based on a survey of adult decision-makers conducted in January 2024, reveals a variety of important information, including barriers to purchasing insurance, gender gaps in coverage and even generational trends with regard to insurance.
Here are some key life insurance facts and stats from the study:
- Perceived insufficient coverage: 22 percent of life insurance owners believe they do not have adequate coverage.
- Market stability: The proportion of respondents who feel they need life insurance has remained stable since 2022, with 30 percent of non-owners expressing a need.
- Income and insurance needs: Among those earning $50,000 to $149,999 annually, 39 percent report a need for more life insurance, highlighting a significant interest from middle-income consumers.
- Gender gap: Women are less likely to have life insurance than men, with a consistent 11-point gap over the past 14 years of the study.
- Generational trends: Baby Boomers have the highest rate of life insurance ownership. Gen Z, now aging into the study’s demographic, shows growing interest despite lower ownership rates, with half indicating they need more coverage.
- Diverse needs: Black and Hispanic Americans report a higher need for life insurance protection compared to other groups.
- Financial concerns: Millennials currently express the highest level of concern over financial matters, a notable shift from Gen X in previous years.
- Cost misconceptions: Approximately 72 percent of all participants overestimated the cost of a basic term life insurance policy, a common misconception year after year.
- Knowledge gaps: Over a quarter of younger generations cite a lack of knowledge about life insurance products as a barrier to ownership.
- Community trust: One in five individuals identifying as LGBTQ+ prioritize working with insurance professionals who share their sexual orientation or are known allies.
These statistics reveal a stable yet evolving landscape in life insurance, characterized by persistent misconceptions about cost and coverage needs across diverse demographic groups. As the life insurance industry continues to adapt to changing demographics and economic conditions, understanding these trends becomes increasingly important for anyone involved in financial planning.
How many people have life insurance
Building on the insights provided by the 2024 Insurance Barometer Study, approximately 51 percent of Americans report owning at least one life insurance policy, indicating stable coverage levels over recent years. The study reveals that 42 percent of American adults either need to obtain life insurance or increase their existing coverage. This persistent need-gap includes about 102 million adults, blending those who are uninsured and those who are underinsured.
Despite the awareness of life insurance’s importance, barriers remain. About 30 percent of those without coverage recognize the need but have not purchased insurance, mainly due to perceived high costs, other financial priorities or uncertainty about the necessary coverage amount. Additionally, 10 percent of policyholders feel they need more coverage than they currently have, suggesting a substantial opportunity for the industry to better serve existing customers.
Overall, the gap between those who have life insurance and those who still need it is significant, emphasizing the ongoing challenge for the industry to address misconceptions about cost and educate consumers on the value and potential affordability of life insurance.
Life insurance statistics by age
One of the most significant determining factors in life insurance costs is age. The premium amount increases on average 8-10 percent for every year of age. Age can also influence whether a person qualifies for life insurance coverage at all. Depending on the type of policy, the maximum age for approval ranges from 70-85 years old. But there are also some policies, such as guaranteed issue whole life insurance, that have a minimum age requirement — typically 50 years old).
Other interesting life insurance statistics around age include:
- According to the 2024 Insurance Barometer Study, the percentage of life insurance ownership tends to increase with age.
- Gen Z (ages 12-27) claim a 36 percent ownership of life insurance.
- 50 percent of Millennials (ages 28-43) own life insurance.
- Gen X (ages 44-59) and Baby Boomer (ages 60-78) claim the highest percentage of ownership at 55 percent and 57 percent, respectfully.
- Millennial and Gen X generations are significantly more likely to own term life insurance when compared to younger and older generations.
- 72 percent of Gen Z Americans are likely to own permanent coverage, the most likely group of the generations.
- Gen Z represents the highest number of individuals with a need for more coverage, at 49 percent. Comparatively, Baby Boomers show a 27 percent need gap, the smallest gap of the different generations.
- The average life expectancy in the U.S. in 2023 was 78.4 years, a 0.9% increase from 2022.