Life Insurance Facts and Statistics 2025 | Bankrate

For many people, life insurance is a vital part of their financial strategy. If a person passes away, their life insurance policy can provide necessary support for their spouse or partner and their children. For other people, life insurance allows them to leave a sizable bequest to a cause about which they are passionate. But at the same time, there are many misunderstandings around life insurance, what it costs and how it works. Bankrate’s insurance editorial team, which has extensive industry experience, did the research into life insurance facts and statistics to help you understand what’s true about life insurance, so you can make the right decision for your own situation.

Life insurance facts and statistics

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: 42 percent of adults believe they do not have adequate life insurance 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: The overall need for life insurance is higher among women (45 percent) than
  among men (39 percent), with a greater difference found among non-owners.
• 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

To find out how many people have life insurance, Bankrate reviewed data from a number of sources. LIMRA states that 51 percent of American consumers report owning a life insurance policy.  But that’s not the whole picture. According to the organization, 74 million Americans who don’t have coverage could benefit from it, while 25 million Americans who have a policy would be better served by increasing their death benefit amount.

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 claims statistics

In 2024, insurance benefits and claims totaled $965.6 billion, according to the Insurance Information Institute (Triple-I). This number has increased when comparing 2023’s benefits and claims, which totaled $831.9 billion.

This amount includes death benefits, annuity benefits, disability benefits and other payouts. The largest payout in 2024 was $484.2 billion for surrender benefits and withdrawals from life insurance contracts made to policyholders who terminated their policies early or withdrew cash from their policies.

Life insurance statistics by age

One of the most significant determining factors in life insurance costs is age. The premium amount increases an average of 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 Boomers (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.

Life insurance industry statistics

Recent years have underscored the importance of financial preparedness for families across the globe, with events like the COVID-19 pandemic emphasizing the need for protection against unforeseen circumstances. This heightened awareness has sparked a significant increase in the demand for life insurance, as many seek to ensure their loved ones are safeguarded financially. The industry’s response to this shift has been characterized by adaptation and growth, meeting the evolving needs of consumers with enhanced offerings and services.

Here’s how the landscape has evolved and what the latest data from 2024 reveals about the state of the life insurance industry, according to LIMRA’s findings.

• Overall market growth: The total U.S. life insurance new annualized premium increased by 8 percent so far in 2025 to $3.9 billion.
• Policy sales increase: The number of policies sold rose 1 percent year over year in the first quarter of 2025.
• Whole life insurance: Whole life premiums make up 37 percent of the total new annualized premium in the first quarter, a slight increase of 2 percent over the first quarter of 2024.
• Term life insurance: Term policies held 19 percent of the U.S. market share, a drop of 1 percent from the first quarter.
• Indexed universal life: IUL increased 11 percent, to $959 million, with policies sold increasing 7 percent..
• Variable universal life: VUL new premium increased 41 percent in the first quarter to $533 million, with VUL premium at 14 percent of the total market.
• Fixed universal life: Fixed UL new premium dropped 4 percent to $235 million because of lower current assumption and lifetime guarantee sales, according to LIMRA. Fixed UL policies represented 6 percent of new premium in the first quarter.
• Market share: The company with the highest market share in 2024 was Northwestern Mutual with 6.76 percent. It was followed by Metropolitan Group (MetLife), tied for second place with New York Life at 6.35 percent each.  

The bottom line

There is clearly room for growth in the U.S. life insurance market, especially among consumers who take the time to educate themselves about the realities and the myths of the life insurance industry. Although many people believe life insurance is an expense they cannot afford, the truth is that consumers, especially when they are younger and healthier, may find affordable policies that meet their needs.

At this point in 2025, several types of policies have seen increased interest from consumers, including indexed universal life, variable universal life and whole life. As younger individuals in the Gen Z, Gen X and Millennial generations begin to think about retirement and start preparing their families for any financial situation, it seems likely that increases will continue.

While the industry has faced periods of reduced coverage among Americans, the recent uptick in policy sales points to a revitalized interest in securing life insurance. This trend highlights a closing gap between the coverage people have and the amount they actually need, reflecting a shift toward greater financial security and preparedness among individuals and families.