Facts Statistics: Life insurance | III

life insurance property

according to the 2022 insurance barometer study, conducted by limra and la vida pasa, 106 million adults lack life insurance, or adequate coverage. the needs gap, what people have versus what they said they need, is at an all-time high and is more than double what it was 12 years ago. the percentage of households that say they would be financially secure if the main wage earner were to die suddenly is 68 percent among life insurance owners, compared to 47 percent among those without life insurance. Seventy-eight percent of those with individual and employer-based life insurance said they feel secure.

life sector/annuity

Traditional life insurance is no longer the core business of many companies in the life insurance industry. The emphasis has shifted to writing annuities, which accounted for 48 percent of direct life/annuity premiums written in 2021. Annuities are contracts that accumulate funds or pay a stream of fixed or variable income. the income stream may be for a specified period or over the lifetime of the contract holder or beneficiaries. accident and health insurance, which includes distinctive products in addition to traditional health insurance, represents 26 percent of direct written premiums. In addition to annuities, accident and health, and life insurance products, life insurers may offer financial services such as asset management.

Reading: How many life insurance policies are sold each year

Traditional health insurance, which is not included in this section and is not considered part of the life/annuity sector, is described as private health insurance. Health insurance pays for medical, surgical, and hospital services received by the insured, as well as routine and preventive care, usually within an in-network format. Of the many types of plans available, most include a deductible paid by the insured and the benefits received are tax-free.

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Accident and health insurance, a product provided by the life/annuity and property/casualty (p/c) sectors, encompasses a variety of specialized health-related products, such as reimbursement for the time a insured spent in a hospital or was disabled; short-term and long-term employment-based disability; long-term care and catastrophic or critical illness insurance. Accident and health insurance is not intended to replace health insurance.

premiums per branch

credit life insurance

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Credit life insurance, a form of decreasing term insurance, protects creditors, such as banks, but the borrower pays the premium. The policy covers the outstanding balance of the loan if the borrower dies before the loan is paid off. the face value of a policy decreases as the loan balance is paid off until both equal zero. When insured loans are paid off early, the insurer returns premiums for the remaining term to the policyholder. the accident and health credit, a similar product, provides a monthly income if the borrower becomes disabled.


Life/annuity and P/C insurers are key players in the capital markets, with $9.7 trillion in cash and assets invested in 2020, according to S&P Global Market Intelligence. life insurance and annuity cash and invested assets totaled $4.7 trillion in 2020, and separate account and other investment assets totaled $3.0 trillion. insurer p/a cash and invested assets were $2.0 billion in 2020.

Because life insurance products are long-term, generally in force for 10 years or more, payouts are predictable. therefore, life/annuity insurers invest primarily in long-term products. In 2020, life insurers, excluding separate accounts, invested 70 percent of their assets in bonds and 3 percent in corporate stocks. life insurers invested 13 percent of their assets in mortgage loans on real estate that take seven years or more to mature.

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distribution channels

Independent agents control about half of the individual life insurance market. from 2012 to 2021, the share of independent insurance agents in the personal life insurance market grew from 44% to 50%. the direct response channel increased slightly over the same ten years, from 5 to 6 percent. affiliated agents have lost some ground, falling from 43% to 39%, as shown in the chart below.

online sales

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According to Limra’s 2021 Insurance Barometer Study, there has been a substantial consumer shift in favor of online life insurance shopping and purchasing due to technological advances and the COVID-19 pandemic. Consumer preference for online life insurance purchases increased 29 percent from 2016, when online purchases were first added as an option to the study.

other sales channels

Workplace marketing is the sale of voluntary (employee-paid) insurance and financial products in the workplace. Products can be sold individually or in groups, and policyholders typically pay premiums through regular payroll deductions. Workplace health and life insurance sales totaled $8.3 billion in 2021, up from $7.46 billion in 2020, according to the Eastbridge Consulting Group.

separate accounts

Separate accounts, funds held separately from an insurer’s general assets, contribute to the income of life/annuity insurers. According to the National Association of Insurance Commissioners, separate accounts were originally established in response to federal securities laws relating to investment-linked variable annuities. Variable annuities work like mutual funds, with earnings that vary depending on the annuity’s investments. After evolving rapidly over the last 20 years, separate accounts now support a variety of hybrid investment products. (See life insurance/annuity income statement chart above.)

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In 2021, separate accounts contributed $41 billion to overall life insurance/annuity revenue of $945.7 billion.

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