Life Insurance Statistics for 2025

American life insurance ownership has stabilized at 51%, but large protection gaps exist across different demographic groups. Though carriers paid nearly $150 billion in benefits last year, millions recognize their vulnerability yet go without coverage because of perceived affordability challenges and competing financial priorities.

These market trends provide context for assessing protection needs. Among the 75 million Americans with no coverage and 27 million requiring additional protection, understanding policy types and costs requires insight into how insurers structure offerings.

American life insurance ownership has shifted over the past decade, with 51% of adults currently reporting they own at least one policy. Ownership declined from 63% in 2011, though the market has stabilized somewhat after hitting a low of 50% in 2022.

The Insurance Barometer Study tracks protection products beyond traditional life insurance that complement financial security planning. While life insurance ownership has wavered, disability and long-term care coverage have remained consistent at much lower levels.

About 19% of Americans report having disability insurance and 18% have long-term care coverage. Both numbers are overestimated because of consumer confusion about benefits through different insurance products.

Among Americans with life insurance coverage, sources differ. Most policyholders obtain protection through individual market purchases rather than workplace benefits. Of the 51% who own life insurance, more than half (55%) have individual coverage only, while 25% rely exclusively on employer-provided policies.

Nearly one-fifth (19%) of insured Americans maintain coverage from both individual and workplace sources. The 49% without any coverage shows a substantial protection gap, with researchers noting this figure understates workplace coverage, as many employees don't know about employer-paid policies obtained through passive enrollment.

In 2024, IUL premiums grew 4% year-over-year to reach a record $3.8 billion, driven by simplified product designs targeting middle-income and mass affluent consumers seeking retirement savings vehicles with downside protection. And whole life's market dominance has declined, though it remains the largest segment by premium volume at $5.8 billion and appeals to consumers during interest rate cuts and market volatility.

Baby boomers, men, Black Americans and affluent households show the highest life insurance coverage rates in America, while younger adults, women, Hispanic Americans and lower-income families remain underinsured despite expressing greater need for financial protection.

Generational differences reveal clear life-stage progression in insurance adoption, with ownership increasing steadily from young adulthood through retirement years as financial responsibilities evolve and awareness grows.

Source: LL Global, Inc. and Life Happens®

Delayed family formation impacts these patterns. The average age of first-time parenthood rose from 25.6 in 2011 to 27.3 in 2021, pushing coverage triggers later for younger generations.

Men are 11 percentage points more likely to have coverage than women, despite women's growing economic influence and financial decision-making power.

Source: LL Global, Inc.

The 11-point gap matches the largest in the study's history. Women comprise 48% of the workforce yet maintain lower coverage rates, creating both a challenge and growth opportunity for insurers.

Cultural differences and historical relationships with financial services drive participation rates across demographic groups.

Source: LL Global, Inc. and Life Happens®

Black Americans maintain their strong connection to life insurance. Hispanic Americans saw the most volatility, dropping from 51% ownership in 2021 to 41% in 2022 before rebounding.

Affluent households are more than twice as likely to own life insurance as lower-income brackets.

Source: LL Global, Inc. and Life Happens®

Middle-income households represent the largest market by volume. About 50 million adults could benefit from new or additional coverage. Lower-income families face affordability constraints despite needing financial protection most.

America faces a life insurance shortfall affecting 102 million adults who acknowledge needing coverage but lack adequate protection. This includes 27 million current policyholders requiring more protection and 75 million Americans with no coverage.

This deficit marks a shift from pre-pandemic levels. Between 2011 and 2019, 31% to 36% of adults reported insufficient coverage, compared with 42% in 2024. Despite economic recovery and subsiding COVID concerns, this awareness has persisted, showing how Americans view financial vulnerability has fundamentally shifted.

American life insurers paid $148.7 billion to policyholders and beneficiaries in 2023, with $89.1 billion in death benefits and $41.6 billion in policy surrenders. These payments show how the industry provides both end-of-life financial protection and living benefits, while termination patterns show important trends in how Americans maintain their coverage.

When policyholders die, insurers provide financial protection to families through death benefit payments. In 2023, companies paid $89.1 billion to beneficiaries nationwide, a 2.8% decrease from 2022 but maintaining an upward trajectory with a 3.3% average annual increase since 2013.

Individual policies generated the largest portion at $66.3 billion. Employer-provided group life insurance accounted for $22.5 billion. Credit life policies provided $273 million to cover outstanding loans of deceased borrowers.

Life insurance policies with cash value allow policyholders to terminate coverage and withdraw accumulated cash value. These surrender payments totaled $41.6 billion in 2023, a 39.1% increase from the previous year.

Individual policy surrenders accounted for $35.8 billion. Group policy surrenders generated $5.8 billion. The increase reflects changing economic conditions and consumers' need for liquidity.

The voluntary termination rate for individual life policies reached 5.4% in 2023 based on face amount. This rate includes policies that lapsed (4.3%) and those surrendered for cash value (1.0%). Group policies had a termination rate of 4.8%. Credit insurance had higher termination rates at 11.4%.

When measured by policy count rather than face amount, individual insurance termination rates were higher at 8.5%, suggesting smaller policies lapse more frequently than larger ones. Group terminations by policy count were 3.9%. Credit insurance reached 14.7%.

Answers to the most common questions about life insurance ownership trends, policy rules and key considerations: