Life insurance statistics can help paint a picture of who uses this financial tool and how. Take a look at some statistics about life insurance below.
What Percentage of the Population Has Life Insurance?
According to Statista, 54% of adults in America had life insurance in 2020.
Among the 46% who did not have life insurance, roughly half said they didn't buy it because they felt it was too expensive. Around 20% said they didn't think they needed it. Statista notes that many people who didn't have life insurance also had misconceptions about how this tool works, especially with regard to taxes.
How Much Life Insurance Is There?
According to the American Council of Life Insurers 2020 Fact Book, more than $10 trillion in individual life insurance policies was in effect in the nation in 2019. When you add in group and credit life insurance, the total was close to $20 trillion.
How Much Life Insurance Do People Carry?
The ACLI's Fact Book indicated an average individual policy amount of $178,000 in 2019.
It's important to note that you should not base your own life insurance purchase on an average, though. Life insurance is meant to provide for a specific need for your loved ones. Consider those needs and what you want life insurance to be able to cover, and use that information to decide how much you need to purchase.
Why Do People Buy Life Insurance?
The Statista figures indicate that roughly 37% of Americans — a little over a third — purchased life insurance to replace income.
This means that someone is a wage owner for their family or dependents. They purchase life insurance on themselves so that their beneficiaries receive money should they die. That money could then be used to cover living expenses in lieu of the wages that the person normally contributed to the household.
Around 30% of Americans said they owned life insurance to cover final expenses. Life insurance payouts can help families cover costs such as funeral and burial expenses or medical bills associated with final care for their loved one.
The Role of Life Insurance Statistics in Your Purchase
These life insurance statistics are simply meant to provide information and perspective on the topic as a whole. Buying life insurance is a very personal choice, and you need to consider your personal situation and the needs of your beneficiaries. Talking with an experienced life insurance agent or working with an online provider to find the right policies for you can be a good idea.