Jennifer Rudden
Research Lead Financial Services & Real estate
Life insurance in the United States - statistics & facts
Getting married or having children often triggers people to take out life insurance. This coverage financially protects the policy owner's loved ones in the case of their untimely death as it means they will receive a lump sum from the insurance company. Yet, life insurance ownership in the United States dropped over the past decade. In 2023, about half of U.S. adults owned life insurance, down from 63 percent a decade earlier. This lump sum is often used to cover burial costs, pay off debt held by the deceased, or pay for children's college tuition. The median cost of a funeral for an adult in the U.S. continues to increase. Consumer debt in the U.S. is also on the rise. Being able to cover these expenses with a life insurance payout may help lighten the load for the grieving family.
Life insurance has lost its luster among U.S. consumers in recent years, which could spell disaster for life insurance companies unless they do something to reverse this trend.
Who are the market leaders?
Some of the largest life insurance companies in the United States by market capitalization include MetLife, American International Group (AIG), and Prudential Financial. In 2022, MetLife generated most of their revenues domestically – significantly higher than revenues generated in other regions or segments. In 2023, Milwaukee-based Northwestern Mutual had the highest market share of life insurance companies in the U.S. Even though the market is dominated by a handful of large insurance corporations, approximately half of all life insurance sales are made by independent agents. This means that the insurance companies are increasingly reliant on these agents and have to surrender a portion of their profits to pay for their services.How has the life insurance industry changed over time?
In the United States, the life insurance industry is regulated at the state level, which means that each state has its own rules about, purchasing, maintaining, and claiming life insurance. The total number of policies in force across the U.S. in 2022 exceeded 250 million – down from around 335 million policies in force in 2008. Similarly, the total number of life insurance companies in operation in the United States has also decreased over time.Life insurance has lost its luster among U.S. consumers in recent years, which could spell disaster for life insurance companies unless they do something to reverse this trend.
