Life Insurance Industry Trends and Key Insights

The life insurance industry is undergoing significant changes, driven by shifting consumer behaviors and technological advancements. The industry's growth is expected to reach $6.3 trillion by 2025, with the global life insurance market projected to expand at a compound annual growth rate of 6.1%.

Consumers are increasingly seeking personalized and digital experiences, with 75% of online shoppers expecting a seamless experience across all channels. This shift towards digitalization is expected to continue, with the use of artificial intelligence and machine learning becoming more prevalent in the industry.

The rise of online platforms and direct-to-consumer models is also changing the way life insurance is sold and purchased. In the US, for example, the number of online life insurance applications increased by 50% between 2020 and 2022.

A unique perspective: Cavendish Online Life Insurance Broker

The life insurance industry has seen a significant shift towards digitalization, with online platforms now accounting for over 50% of new policies sold. This trend is expected to continue, with experts predicting a 20% increase in online sales by the end of the year.

Curious to learn more? Check out: Online Life Insurance Policy

Traditional life insurance products, such as term life and whole life, are being complemented by newer offerings like index universal life and variable universal life. These products offer more flexibility and customization options, appealing to modern consumers.

In response to changing consumer needs, insurers are incorporating more innovative features into their products, including built-in savings components and long-term care riders.

Broaden your view: B Owns a Whole Life Policy

When shopping for life insurance, you'll notice that most people opt for whole policies over term policies. 60.7% of new life insurance policies purchased are whole policies.

Whole life insurance provides lifelong coverage, which can be a huge relief for many people.

One of the key benefits of whole life insurance is that it creates cash value over time.

Term life insurance, on the other hand, only provides coverage for a designated period of time. 39.3% of policies are term policies.

This makes term life insurance a more affordable option for those who don't need lifelong coverage.

Broaden your view: Death Insurance Policies

Burial cost coverage is a crucial aspect of life insurance. 60% of life insurance purchasers buy life insurance specifically to cover these costs.

The average cost of a funeral today is $8,094.30, leaving a significant burden on loved ones.

Discover more: 15 Year Term Life Insurance Cost

A record-high proportion of consumers (39 percent) intend to purchase life insurance within the next year, with Gen Z adults and millennials leading the charge.

This trend is especially notable among parents, with 59 percent of parents with minor children owning life insurance, compared to 52 percent of the general population.

Many of these parents are recognizing the importance of having enough coverage, with 47 percent acknowledging they don't have enough life insurance, compared to 41 percent of the general population.

Recommended read: My Parents Took Out a Life Insurance Policy on Me

Health insurance is a crucial aspect of insurance ownership, and it's interesting to note that credit life and credit accident and health insurance direct premiums written have been steadily increasing from 2014 to 2023.

Additional reading: Life Insurance Brokerage

Credit life insurance, in particular, has seen significant growth, with direct premiums written increasing over the years.

Some of the top writers of accident and health insurance by direct premiums written in 2023 include companies that have been consistently producing high-quality insurance products.

Here are the top 10 writers of accident and health insurance by direct premiums written in 2023:

These companies have demonstrated a strong commitment to providing quality health insurance products to their customers, and their direct premiums written reflect their success in this area.

A record-high 39 percent of consumers intend to purchase life insurance within the next year, according to the 2023 Insurance Barometer Study.

This is particularly true for younger generations, with Gen Z adults at 44 percent and millennials at 50 percent.

Parenting also plays a significant role in life insurance ownership, with parents of minor children more likely to own life insurance (59 percent) compared to the general population (52 percent).

These parents are also more likely to acknowledge they don't have enough coverage, with 47 percent saying so, compared to 41 percent of the general population.

It's clear that life insurance ownership is on the rise, especially among younger adults and parents.

You might enjoy: Transfer Ownership of Life Insurance Policy to Child

Independent agents control more than half of the individual life insurance market. This is a significant trend that has been observed over the years.

From 2014 to 2023, independent insurance agents’ share of the personal life insurance market grew from 46 percent to 52 percent. This represents a notable increase in their market share.

The direct response channel remained the same over this period, at 6 percent. This suggests that independent agents have been gaining ground at the expense of other channels.

Affiliated agents have lost some ground, falling from 42 percent to 37 percent. This shift in market share highlights the changing landscape of the insurance industry.

For more insights, see: Independent Life Insurance Agent