Life Insurance Ownership Down 24% in Past 20 Years
Ever since financial institutions started selling investments in the 1980s and 1990s, they have expected sales of life insurance to become a significant part of the business. But few firms derive as much as 5% of their investment services revenue from life insurance sales. Why? Directors of bank-based advisors point to the cumbersome application process, advisor reluctance to discuss mortality and morbidity issues with clients, and the stigma life insurance salesmen have among other financial advisors. But a fundamental problem might be that American families are not buying life insurance.
Life insurance ownership of US households has fallen from 71% in 2002 to only 54% in 2022. Gen Z and millennial households— the prime market for life insurance— are twice as likely to have group life than individual life policies.
The longstanding adage in the life insurance industry is that life insurance is sold, not bought. But people are not buying it.