12 Life Insurance Statistics You Really Need to Know

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It’s interchangeable.

Life Insurance or Love Insurance. It’s an act of love to protect your loved ones.

Are you the breadwinner in your household? If you bring home the bacon for your loved ones, it’s important to remember that there should never be a time when they run out of bacon.

That’s where life insurance comes in. These 12 stats may reveal something worth pondering.

1.) A Total Of 267 Million Life Insurance Policies Are Active In The US

It’s not surprising that 54% of Americans have taken some form of precaution like having life insurance. Approximately 27.8 million life insurance policies are sold each year in the United States since 2018. The face amount of all 267 million policies today is $3.29 trillion.

2.) Top Reasons Why People Buy Life Insurance

Ironically, the main reason why people buy life insurance pertains to death. Nearly 8 out of 10 people buy life insurance for death benefit purposes.

  • 83% buy to cover burial and final expenses
  • 68% buy to replace breadwinners’ loss of income
  • 63% buy to pass on wealth or estate to heirs

3.) COVID-19 Gave Rise To 1 In Every 5 Americans Buying Life Insurance

The pandemic caused Americans to go on a shopping spree for life insurance, with insurance firms reporting significant sales increase. That could mean approximately 20% bought life insurance for the first time due to COVID-19.

“Americans are ‘panic buying’ life insurance due to coronavirus pandemic” — “Many firms have noted double-digit increases in the number of life insurance policies they’ve sold during the Covid-19 pandemic relative to last year. “


4.) Who Would Likely Buy An Insurance Policy Due To COVID-19

  • 45% of Millennials
  • 42% of those earning more than $150k a year
  • 38% of Black Americans
  • 33% of Men

5.) The Chance Of An Insurance Claim Getting Denied Is As Slim As 0.02%

In the pandemic year of 2019, the average payout rate for life insurance was 98.3%. More people are able to get their claims approved and close to 0% getting denied.

It’s very rare for a life insurance company to deny a policy claim — at the end of 2019,
only 0.02% of life insurance payouts were reportedly delayed or denied.


6.) The Average Life Insurance Payout Benefit In The US Is $168,000

Life insurance benefits can be a lifesaver, no matter how much coverage a policyholder has decided on. Beneficiaries have a lot of options on how they can receive the payout, according to their needs. Usually, lump sum payouts and monthly income payouts.

7.) Top Reasons Why People Don’t Buy Life Insurance

  • 60% say they can’t afford it
  • 55% say they have other money priorities
  • 53% say they’re unsure of the type and coverage amount

8.) 50% Of Americans Overestimate The Price Of A Life Insurance Policy By 3X The Actual Cost

On the other hand, 44% of Millennials overestimate the cost of term life insurance by 5x more than they should. The cost of this insurance can often be much lower than they expect.

But life insurance may be more affordable than you think… When asked to estimate the cost of a $250,000 term life policy for a healthy 30-year old, more than half the respondents said $500 or more per year. The actual cost is closer to $160 per year.


9.) 29% Of All Customers Are At Ease With Using The Internet To Buy A Life Insurance Policy

Most customers use social media and other online platforms to verify an insurance agent or an insurance firm. In this case, “Legit” would be a good shopper-approved name.

Here’s a percentage breakdown of customers and their choice of platforms.

  • 26% use Facebook
  • 17% use YouTube
  • 11% use Instagram
  • 9% use Twitter

10.) What 50% Of Americans Searching For Life Insurance Want From Insurance Companies

  • Convenience
  • Speed
  • Simplicity

“Overall, almost half (48%) of Americans are more likely to buy life insurance if simplified underwriting is used.”


11.) Top 5 States With The Highest Life Insurance Coverage

The top 3 states buy more insurance coverage equivalent to more than all 36 combined, but California alone bought more coverage than all of the 27 other states.

  • California
  • Texas
  • New York
  • Florida
  • Illinois

12.) Top 5 Life Insurance Companies In The US Based On Percentage Of Market Share

  1. Northwestern Mutual Group – 8.93%
  2. New York Life Group – 8.30%
  3. Metropolitan Group – 7.18%
  4. Prudential of America Group – 6.66%
  5. Mass Mutual Life Insurance Group – 6.29%

13.) Bonus Stat

Thanks for making it all the way through to here.

Just a small bit of trivia before you leave.

A Well-Known US Billionaire Bought The Most Expensive Life Insurance Policy In The World For $201 Million

Confirmed by Guinness World Records, the unnamed billionaire who bought the single-life policy for $201 million lives in Silicon Valley California and is prominently active in the field of technology.

The previous record holder who bought a $100 million life insurance policy is no other than US music industry figure David Geffen, the boss of Geffen Records.

Why is life insurance important in financial planning?

A life insurance policy will provide your loved ones with a sum of money in the event of your untimely death. That sum of money should be invested properly in order to create passive income to replace the income that you once provided.

What is Passive Income?

Passive Income can be defined as an income received on a regular basis, with little effort required to maintain it.

Alvin Medalla
Alvin Medalla
Alvin is a WordPress wizard and an all-around website ninja. He is the content manager, research specialist, image expert, and statistics aficionado - here on the Dumb Passive Income blog.
Alvin Medalla
Alvin Medalla
Alvin is a WordPress wizard and an all-around website ninja. He is the content manager, research specialist, image expert, and statistics aficionado - here on the Dumb Passive Income blog.

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