Statistics

V Insurance statistics
E
very individual has financial concerns, be it retirement, inheritance, or perhaps even monthly bills. A study in 2019 collected the main financial concerns of California and listed them.
At first glance of the statistics above, life insurance may not be an overwhelming concern to the average individual, however, of the 13 main financial concerns, life insurance can provide a solution to 4 of them, bumping up the combined percentage of 15% to second place, just below retirement.
Life Insurance Market Penetration
Market penetration for life insurance equals 57% among Californian adults. It peaked at 63% in 2011. Ownership averaged 59% over the past nine years; it has declined slightly since 2016

T
ype of Life Insurance Owned

Most adults own life insurance, around 3 in 5 consumers. Among the 57% of individuals that have life insurance, 39% own individual life insurance, and 28% own individual life insurance only.
Around 36% of individuals own group life insurance, and 18% own group life insurance only. 43% of individuals do not own life insurance at all.
Of the 57% of individuals that own life insurance, 69% are male, and 31% are female.

Life Insurance Knowledge Gaps

The following graphic is a clear example of the association between product ownership and product knowledge. Life insurance owners are more likely to understand basic product concepts, such as the relationship between a person’s health status and the cost of coverage.
This information affirms the notion that more informed consumers are likely to make better decisions regarding life insurance coverage.
A
ffordability and value are two obstacles that deter consumers from purchasing life insurance. If more consumers understood life coverage affordability, more consumers would shop for coverage.

Expected Cost of Term Life Insurance Coverage

Lack of general life insurance knowledge causes many consumers to overestimate the cost of term life insurance coverage.
Over half of Californians thinks the cost of a term life insurance policy is 3x or more than its actual cost.
W
hen asked to estimate the cost of $250,000 term life policy for a healthy 30-year-old, over half of the respondents said $500 per year or more.
The average cost of such a policy is closer to $160 per year, suggesting over half the population thinks term life insurance is over three times more expensive than the true cost.
The Millennial generation, likely to overestimate the price tag for term insurance. This indicates that marketers targeting prospects in the young adult market need to inform their prospective clients that term coverage is probably much more affordable they think it is.